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TRANSIT CRISIS AVERTED - BUT AT NO SMALL COST FOR CONSUMERS, CHICAGO HOME BUYERS/SELLERS!

FREE RIDES FOR SENIORS, BUT SALES TAX WOULD INCREASE TO 9.5% IN CHICAGO - TRANSFER TAX FOR REAL ESTATE UP 40%!

After nearly a year of wrangling, the Illinois State Legislature yesterday passed a Mass Transit Funding program that will avert massive service cuts and fare increases planned for this Sunday, January 20th.  The state approval negates the needs for proposed draconian cuts to service, and a significant fare increase for city and suburban bus and train riders in Chicago IL and the suburbs.  It also give the Chicago area Regional Transportation Authority (RTA) far greater oversight over matters involving the CTA.

METRA - the major commuter rail service serving the Chicago area - does plan to proceed with it's across-the-board 10% fare hike for train riders on February 1st, and a "prudent measure" in light of today's economy, and to help replenish four years of diverting $168 Million from the METRA Capital Fund to it's Operating Fund.

The new program would give those aged 65 or older free access to bus and train lines across the state - mainly operating in major metropolitan areas.  Individual transit agencies across Illinois have 60 days to implement a free-fare plan for seniors.

The effective date of the sales tax increases is April 1st, 2008.  It would increase general sales tax in the City of Chicago by 0.25%,  to 9.50% - one of the highest sales tax rates in the U.S.  Suburban Cook County residents will see their sales taxes rise 0.25%.  Because many larger suburbs have imposed their own incremental sales taxes, the tax rate would increase to between 8.25% in most Chicago suburbs located in Cook County, to 9.25% in the Town of Cicero, and 9.00% in suburban Evanston.

Sales tax rates in "collar" counties surrounding Chicago - Lake, DuPage, McHenry, Kane, and Will Counties - will increase 0.50%.  They will now range between 7.50% in most outlying suburbs, to 7.75% in DuPage County Suburbs, including Wheaton and Downers Grove.

A key provision in the approved legislation includes a 40% increase it the City of Chicago Real Estate Transfer Tax.  The added tax must be enacted within six months, and would raise $100 Million to pay down debt and help fund the CTA Employee Health Care and Pension Programs..

Currently $7.50 per thousand dollars of home sale price, and imposed on the buyer of the property, the increase would add $3.00 to the Transfer Tax.  The Chicago City Council would have to determine whether the buyer, or the seller, or a combination of buyer and seller, would be required to pay the increase.  Sellers currently pay $1.50 per thousand as a combined State of Illinois and County Real Estate Transfer Tax. 

The increase would make a Chicago real estate transaction one of the costliest places to sell a home nationwide, taking the Real Estate Transfer Tax into account.  Los Angeles currently has a $10.00 per thousand combined county and city Transfer Tax.  The rate in New York City is far higher - currently, $14.25 per thousand dollars of sale price for properties over $500,000.

The vote for the $530 Million measure was close in both the IL House and Senate, and made more complicated because of IL Governor Rod Blagojevich's demand to tie the free-ride-for-seniors provision to the legislation, in return for his reluctant support on the sales tax increases.   Previously, the IL Governor refused to accept any legislation that involved a sales tax increase, saying, in part, it would pose an unfair burden on senior citizens living on fixed incomes, and the poor.

There are several links to check for more information.  Read this summary in today's edition of The Chicago Sun-Times.  Today's Chicago Tribune provides an in-depth discussion and video.  See Fran Spielman's article in today's Chicago Sun-Times for how the Chicago City Council might deal with the increase in the Chicago Real Estate Transfer Tax. 

DEAN MOSS & DEAN'S TEAM CHICAGO

Posted: Friday, January 18, 2008 12:08 PM by Dean's Team

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BlogChicagoHomes.com said:

CHICAGO SALES TAX TO INCREASE TO 10.25%, SUBURBAN COOK COUNTY - 9.0% EFFECTIVE NOVEMBER 1, 2008! In an

# March 1, 2008 10:42 AM
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