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BOMA/Chicago files appeal with state Supreme Court to block transfer tax referendum

by Emily Mack

The referendum which asks voters to weigh in on proposed transfer tax changes will be considered in the upcoming election, after a March 6 ruling by Illinois’ Appellate Court. Now, the Building Owners and Managers Association of Chicago (BOMA/Chicago) is challenging that decision.

With a new appeal, the organization wants the Supreme Court of Illinois to hear — and rule — on the case before the March 19 election. In addition to filing the appeal, the association also filed a motion to expedite the case.

BOMA/Chicago first filed a lawsuit over the referendum in January, alleging that the language of the referendum was “unconstitutional.” The ballot question asks voters to vote “yes” or “no” on three changes to Chicago’s real estate transfer tax.

Currently, the transfer tax for all properties is 0.75%. But if voters approve the measure, it will increase on properties sold for more than $1 million. The tax will increase to 2% on properties sold for between $1 million and $1.5 million; the tax will increase to 3% on properties sold for more than $1.5 million. However, for properties that sell for less than $1 million, the tax will drop to 0.6%.

In its initial lawsuit, BOMA/Chicago took issue with that presentation. “The binding referendum would force voters to approve or reject three separate policies in one question, including a tax decrease, to manipulate voters into approving two separate tax increases,” said a press release from BOMA/Chicago at the time.

And the association still feels that way. “The referendum question is misleading and manipulative, and we believe it is important to see this through,” reads a new statement from BOMA/Chicago executive director Farzin Parang.

“The Appellate Court’s opinion implies that an illegal referendum cannot be challenged until after an election — after voters have already been harmed. Given the importance of this topic, we will ask the Illinois Supreme Court to hear an appeal,” Parang went on, referring to the March 6 decision.

Before that, BOMA/Chicago was — temporarily — successful in removing the referendum from consideration after a circuit court ruled in their favor on Feb. 23.

Under the restructuring, roughly 94% of Chicago properties sold would see a tax reduction, according to a WTTW report. However, the city estimates the change would bring in more than $100 million annually. Also known as the “Bring Chicago Home” resolution, the funds generated would then be dedicated to combatting homelessness.

“Bring Chicago home” has been a centerpiece of Mayor Brandon Johnson’s plan to address homelessness, although there are few current specifics on how exactly the projected revenue would be spent.

Parang highlighted that point in a statement about the recent appeal, adding that, “[The tax changes] would give the city hundreds of millions of dollars in blank checks with no actual plan to support the homeless and no accountability.”

Now, BOMA/Chicago hopes the state Supreme Court will take on its case before the election. It’s unclear how likely or unlikely that is. When the Board of Elections and the City of Chicago appealed the Feb. 23 circuit court decision, that matter, too, was placed on an accelerated docket, which proved helpful for those plaintiffs.

Then again, the Illinois Supreme Court may not take on this case at all; the court heard roughly 7% of cases filed in 2022.

Even if the court rules in BOMA/Chicago’s favor — before or after the election — the referendum will have appeared on the ballot. (Early voting and voting by mail has already begun.) However, the resultant “yes” and “no” votes could always be discounted.

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