Votes on a referendum to raise real estate transfer taxes on property sales of more than $1 million in Chicago will be counted after all, the Illinois Appellate Court ruled, after a Cook County judge previously said votes on the citywide ballot measure would be invalidated.
Presiding Justice Raymond Mitchell wrote in Wednesday’s judgment that Cook County Judge Kathleen Burke erred last month in ruling that the referendum would remain on primary ballots but that votes would not be tallied. The two other appellate judges in the case concurred.
The court decision is a victory for Mayor Brandon Johnson and progressive aldermen that back the Bring Chicago Home initiative, an effort that would use increased transfer taxes on many residential and commercial properties to help the city combat homelessness.
“Nothing in this decision is intended to suggest that we have any opinion one way or the other on the merits of the referendum at issue,” Mitchell wrote. “That is a question wisely entrusted not to judges but to the people of the city of Chicago.”
Property owners and other real estate groups led by BOMA/Chicago previously sued the city’s elections board and its commissioners to block the vote, arguing that the bundled, three-part question misled voters and violated Illinois’ municipal code and the state constitution.
It was not immediately clear Wednesday whether the BOMA-led group of plaintiffs that first filed the lawsuit in January planned to seek an appeal with the state Supreme Court. BOMA/Chicago Executive Director Farzin Parang said in an emailed statement to CoStar News that “we’ll review the order carefully and consider next steps.”
There is limited time for a potential appeal, with early and mail-in voting underway and election day less than two weeks away. Bring Chicago Home backers and opponents already have been urging voters to cast votes on the issue as the court battle plays out.
“All votes cast for the citywide question will be counted and reported by the Chicago Board of Elections on Election Night, March 19,” Max Bever, director of public information for the Chicago Board of Elections, said in an emailed statement.
Previously, that agency had said it would sequester ballots in case it was later ordered by a court to count referendum votes.
Critics of Bring Chicago Home have complained that there are no details about how funds raised would be used to combat homelessness, while worrying that it would have unintended consequences such as slowing an already sluggish investment sales market, ultimately leading to fewer new apartment developments and raising rents.
In court, real estate groups argued that referendum’s very wording was illegal because it combines a proposed transfer tax cut on sales below $1 million with increases above that amount, and further increases above $1.5 million. Taxes at the highest level would be 3%, or quadruple today’s rate.
The initial complaint argued that the referendum wording was an example of legislative log-rolling, or “bundling unpopular legislation with more palatable bills so that the well-received bills will carry the unpopular to passage.”
But Mitchell wrote that Illinois courts typically have declined to wade into legislative issues, such as the referendum wording passed by Chicago’s City Council and argued that upholding the Cook County court’s ruling would violate government’s separation of powers.
The Appellate Court also wrote that “we are left guessing as to the bases for the circuit court’s ruling because the lower court gave no reasons for its oral ruling.”
Mitchell wrote that the case was dismissed “for want of jurisdiction,” and added that city agencies should have been allowed to be added as a defendant in the case. The elections board also had argued that is should not be the defendant.
Johnson’s office did not immediately respond to a request for comment on the court ruling from CoStar News.
“We are disappointed in the outcome of this case, but felt it was important to challenge this misleading and manipulative referendum question,” Parang said in the statement. “This massive tax increase would hurt homeowners, renters, union workers and businesses throughout the neighborhoods. Even worse, a yes vote on this referendum is a vote to deliver huge blank checks to the city with no plan for how millions will be accountably spent. We have already ramped up our efforts to educate the public about the negative impacts of this tax increase.”