CHICAGO (CBS) — Mayor Rahm Emanuel will seek a massive property tax hike later this month, as he seeks to shore up police and firefighter pension funds, and close a $750 million budget hole.

Several City Council sources said the mayor and his budget office have told aldermen he plans to raise property taxes by $500 million next year – with $450 million pegged for police and firefighter pensions, and $50 million for a school construction program. It would be the largest property tax hike in modern history in Chicago.

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The property tax hike would mean the owner of a $250,000 home would see his or her property tax bill go up about $500 a year.

Laurence Msall, president of the Civic Federation, a nonpartisan budget watchdog, said the property tax hike is unavoidable if the city is to stabilize its finances.

“It’s going to be very difficult for many people, especially in this economic situation we have, but also in terms of the housing market has not fully rebounded in Chicago; but the reality is if the city doesn’t bring in new revenue, if it doesn’t cut its operations to balance its budget, it faces the potential of a collapse,” he said.

Emanuel also plans to impose a $100 million garbage collection fee for single-family homes and small apartment buildings. Residential buildings larger than a four-flat already are required to pay for private trash collection.

Sources said the mayor’s budget plan could include a number of other taxes, including a $1-per-ride surcharge on taxi rides and ride-sharing services, a tax on e-cigarettes and other smokeless tobacco products, and a new tax on sugary soft drinks. The ride-sharing surcharge was expected to generate about $70 million in revenue, and the smokeless tobacco was expected to generate about $30 million in revenue.

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Msall said the city has been spending more money than it brings in for the past decade, and been using “borrowing and accounting gimmicks, and one-time revenue sources to try to fill that gap.”

“It’s really a day of reckoning for the city of Chicago, and unfortunately for city taxpayers and city residents, it means that we’re going to have to pay a lot more than we would have otherwise if we would have balanced our budget according to generally accepted principles,” he said.

Msall said the mayor and the aldermen have a big job to do to sell the budget plan to taxpayers.

“The reason why the property tax is so politically sensitive, it’s a tax you cannot avoid if you’re a property owner, and the reason why the elected officials don’t like it is because people do recognize it right away. It’s not a tax on somebody else. It’s a tax on the owners, the businesses, and the residents,” he said.

Emanuel is scheduled to present his budget plan to the City Council on Sept. 22.

The mayor is looking to dig the city out of a hole that has been decades in the making, and get away from risky borrowing practices used by his predecessor, former Mayor Richard M. Daley, leading to large deficits.

“The city faces enormous financial challenges. The city’s bond rating is now worst in the country of any major municipality. It’s considered junk bond status. It’s costing the city an enormous amount of money just to operate and borrow, but it does look like every option is on the table, including the very politically sensitive – but most financially reliable – property tax increase,” Msall said.

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The mayor was scheduled to host the last of three town hall meetings on the city budget Thursday evening at Wright College, 4300 N. Narragansett Av., and the property tax hike plan likely will be a popular topic among those who attend.