Harvey will lay off about 10% of the city’s workforce next month as it grapples with a high debt load and millions of dollars in unpaid property taxes, the city said.
Mayor Christopher Clark said in a news release the layoffs, effective Aug. 23, will cause some disruption of city services but that public safety functions, including police and fire protection, will continue.
Clark said Harvey faces $149 million debt, and $12.2 million in unpaid commercial property taxes in just one year.
He said some commercial property owners have piled up decades of unpaid taxes. Without these funds, Harvey cannot sustain city operations at current levels, Clark said.
Clark has taken a hard line to try to convince some businesses to become current on their tax bills, including using city public works crews to install concrete barriers blocking access to them.
Harvey said the cuts are an attempt to stabilize the city’s financial condition and preserve essential services for residents. The affected employees were notified in accordance with the city’s collective bargaining agreement, and the city said Clark’s administration has opened the door to discussions with union leadership to explore financial alternatives.
“This is not a decision we wanted to make,” Clark said in the news release. “But after every effort to avoid cuts—including eliminating discretionary spending, enforcing tax compliance, and making painful operational adjustments—we have no choice.”
The city previously said 465 commercial property owners, as of the end of 2023, owed Harvey more than $12 million in delinquent property taxes. Harvey in January 2023 approved an ordinance that allows denying operating licenses to businesses with unpaid property taxes.
Clark said the “tax-dodging businesses” have placed an unfair burden on other city taxpayers, notably homeowners.
“Harvey residents have borne the brunt of rising costs and unfair tax practices for too long,” Clark said. “It is unconscionable that 465 commercial property owners have failed to pay their taxes while benefiting from police, garbage removal, water, and other critical services. These layoffs are a direct consequence of their failure to contribute their fair share.”
Some of those property owners owing back taxes have told the Daily Southtown they face overdue bills, are having trouble making a profit and that catching up on back taxes seems like an insurmountable task.
Harvey has offered businesses that owe taxes a payment plan option, but Clark previously said a business owner’s payments don’t apply toward reducing their tax debt but instead are collected as a fine.
In announcing the layoffs, Clark cited the previously enacted “12 Million Reasons to Act” campaign to compel commercial property owners to enter into settlement agreements and pay delinquent taxes, but that compliance has remained low.
Some business owners who spoke with the Southtown said the city agreement would allow them to avoid daily $2,500 fines by paying the city either $2,500 per month totaling $30,000 for the year, two payments of $12,000 totaling $24,000 or a lump sum of $20,000.
Clark previously told the Southtown these funds do not go toward outstanding property taxes, but instead go directly to the city in the form of a fine.
Harvey has one of the lowest property tax collection rates, at just 52%, in the Chicago suburbs, according to the Cook County treasurer’s office. For most residents, between 35% and 40% of their tax bill goes to the city.
