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Chicago middle-class homeowners could be spared proposed tax hike-report

(Reuters) – Middle-class homeowners may be exempt from a proposed property tax hike in Chicago, with higher-income homeowners and commercial property owners paying most of the roughly $500 million tax increase planned, Crain’s Chicago Business reported on Monday.

The city’s goal is to ensure that those with homes worth up to the city median, about $200,000 to $250,000 in market value, would pay none of the additional property tax that Mayor Rahm Emanuel is expected to propose on Sept. 22 during his annual budget speech, the report said, citing City Hall insiders.

Under the plan being considered, an existing homestead exemption that all the city’s taxpayers enjoy would be expanded, the business newspaper said.

Owners of homes worth more than the median would get the same expanded homestead exemption, but it would be insufficient to full protect them from paying more property taxes, the newspaper said.

Commercial and industrial property owners would have to pay their normal share of the $500 million proposed tax increase and also pick up what homeowners aren’t paying, Crain’s Chicago Business said.

A plan could be finalized by the end of the week, the newspaper said.

The Mayor’s office could not be immediately reached for comment.

Emanuel won a re-election in April with a mandate to lead Chicago which is on the brink of a financial crisis and plagued by violent crime.

Chicago, the third-largest U.S. city, has an aggregate debt of $21.4 billion, up 60 percent since 2004. (http://reut.rs/1KbbJlY)

A property tax hike could trigger a population exodus to lower-tax states and Emanuel had said earlier that any tax increase would be a “last resort”.

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