Chicago Mayor's Budget Director Got Illegal Property Tax Breaks

Mayor Brandon Johnson’s budget director collected illegal property tax breaks for five years on a South Loop condo she hasn’t lived in since 2019, records and interviews show. The arrangement involved her former boss, Cook County Assessor Fritz Kaegi, whose office approved the breaks even after Annette Guzman said she tried to cancel them.

Guzman, who holds a law degree from the University of Chicago and once oversaw thousands of homeowner exemptions as Kaegi’s chief administrative officer, saved $3,434 in taxes on a condo she listed as an investment property on her financial disclosure statement filed with the Cook County clerk last year. Illinois law allows property owners one homeowner exemption per year and requires them to actually live in the home. Guzman was collecting two exemptions simultaneously, one on the South Loop condo and one on her Bronzeville home where she has lived for the past five years.

Both Guzman and Kaegi say they were unaware of the violation until a reporter asked about it.

After Kaegi’s staff reviewed the situation, they canceled the homeowner exemption on the investment property and ordered Guzman to repay $2,071.89. That figure covers only three of the five years she improperly received the tax breaks. Kaegi also waived any interest payments. Guzman repaid the money Tuesday, according to Kaegi’s office.

When asked why she wasn’t required to repay the full five years of illegal breaks with interest, Guzman offered a simple answer. “I paid what they told me to pay,” she said.

Kaegi’s attorney, Christina Lynch, says the assessor’s erroneous exemption team is now reviewing whether Guzman owes repayment for the two earlier years as well, when she was living with her then-husband in his Northwest Side home.

The story of how this persisted for five years involves a bureaucratic failure, a pandemic, and a series of circumstances Guzman says kept her in the dark. She says she went to Kaegi’s office, around 2020 or 2021 depending on who is recounting it, specifically to cancel the South Loop exemption after she moved out. Lynch’s response to that visit is blunt: “We never processed it.”

Guzman says she didn’t catch the error for two reasons. Her mortgage lender paid the property taxes directly from an escrow account, meaning she never wrote a check or reviewed a bill. And she never updated the mailing address on those tax bills, which were still being sent to her ex-husband’s address four years after their divorce.

The optics of the situation are difficult for the Johnson administration regardless of intent. Guzman bought the South Loop condo in 2007 and was still living there in 2019 while serving as Kaegi’s chief administrative officer. She moved out in September 2019 when she married Martin Guzman. The exemptions continued flowing on a property she was renting out or holding as an investment, not occupying.

The person now responsible for shaping the city’s budget, a document that relies heavily on property tax revenue, was on the receiving end of improper property tax relief for half a decade. That revenue funds Chicago Public Schools, the Chicago Park District, and a range of city services that residents across every neighborhood depend on.

Kaegi, meanwhile, faces his own uncomfortable position. His office processed exemptions for a former top aide without catching a clear violation, then chose to waive interest and limit repayment to three years rather than five once the problem surfaced. Lynch’s framing of the situation as an “assessor error” for which interest has been waived raises questions about whether a taxpayer without connections to the assessor’s office would receive the same generous treatment.

Johnson’s administration has not indicated any disciplinary action toward Guzman. The mayor has staked his political identity on fiscal accountability and equity, particularly for working-class Chicagoans on the South and West sides who often face aggressive property tax enforcement with far less margin for error than a city budget director.

The assessor’s erroneous exemption team will determine whether the full five years of improper breaks must be repaid. That review is ongoing.