A Cruel Paradox: Dropping Home Values, Rising Property Tax Bills

by | Reboot Illinois

The Illinois Legislature is considering designating an official state pie, vegetable and polka (pumpkin, sweet corn and “Another Polka Celebration,” respectively).  If the white-tailed deer weren’t already our state mammal, surely a top contender for the title would be the Beleaguered Illinois Taxpayer.  Chief among the natural predators of this humble yet majestic creature is the taxivore Local Government.

Over 6,000 local units of government levied some $27 billion in property taxes in 2013, making Illinois’ property taxes second highest in the nation.  That figure represents an increase of 36 percent from a decade earlier.  Even after taking inflation into account, the increase still exceeded 10 percent.

How high are our property taxes?  Illinoisans pay far more in property taxes than they do in income tax.  In 2013, for example, property tax collections outpaced the income tax by a full 38 percent.  A recent report notes that the average Illinois property tax bill is $3,939 ($1,850 more than the national average).  To make matters worse, adjusting for inflation, the average home value dropped 19 percent between 2004 – 2013.  Illinoisans are feeling the burden of a cruel paradox; the value of their home is decreasing and their tax bill is going up.

Comparing 2004 to 2013 in 2013 dollars.

Comparing 2004 to 2013 in 2013 dollars.

Illinois Supreme Court – SB1 Ruling

“In their SB 1 ruling, Illinois Supreme Court justices indicate that paying for pensions is more important than funding core government services. “

by Jacob Huebert | Illinois Policy Institute

Last week the Illinois Supreme Court unanimously struck down Senate Bill 1, the pension-reform law former Gov. Pat Quinn signed in 2013. The act’s modest reforms to government workers’ pension benefits would have reduced annual increases in retirees’ benefits, raised the retirement age for younger government workers and put a (generous) cap on pensionable salaries.

The court ruled that even those relatively minor changes violate the state constitution’s pension clause, which says that “[m]embership in a pension or retirement system of the State . . . shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

The court rejected the state’s argument that its police powers allowed it to make those changes to avoid the fiscal and economic disaster that will occur if the state cannot bring its pension costs under control. The pension clause doesn’t include any exceptions, the court said, so there are no exceptions.

What about the possibility that pension spending could crowd out spending on core state services related to public safety? The court explicitly considered this and said, in effect, too bad: the law is the law.

Supreme Court justices are rarely, if ever, so strict when private citizens’ constitutional rights are at stake.

Property Taxes Are Out Of Control, Let Homeowners Take The Driver’s Seat

Piecemeal fixes to the state’s property-tax problem have failed. It’s time to give the purse strings back to average Illinoisans.
by David Giuliani | Illinois Policy Institute

When Gov. Bruce Rauner proposed freezing property taxes across Illinois, Barrington Area Unit District 220 Board President Brian Battle opposed the idea.

Freeze the Levy

This isn’t the first time I’ve pointed out that local municipalities spend too much and property taxes are too high!

“I don’t understand why property taxes are an issue for the state,” he told the Daily Herald.

How could they not be an issue?

Illinois has the highest property taxes in the Midwest. In 2013, property taxes on the average Illinois home were $3,939, about 14 percent higher than runner-up Wisconsin. Neighboring Indiana’s average was $1,507. Is it any wonder Illinoisans are leaving for the Hoosier State?

When it comes to Illinois’ property taxes, a lot of hands are in the pot. Nearly 7,000 local units of government wield taxing power, far more than any other state.

Every year, each entity decides how much money it wants from property taxpayers, an amount known as a tax levy. In 63 counties, if an entity raises the levy by 5 percent or more, it must hold what it known as a “Truth in Taxation” public hearing. This is where officials explain the increase and the reasons for it. Afterward, a governing body may adopt the higher levy.

A cursory Google search will show that many entities increase their levies by 4.99 percent, the highest possible rate without triggering a public hearing. This loophole is a major driver of Illinois’ astronomically high property taxes.

Chicago Tribune – Red Light Cameras Increase Accidents

by Mark Wachtler | Illinois Herald

What is more insulting? The fact that Chicago taxpayers were defrauded out of millions of dollars from a corrupt and criminal Red Light Program. The fact that the Mayor and City Hall have been lying to Chicago residents about the effectiveness of the police cameras. The fact that the company providing the cameras and City Hall were caught in a $2 million bribery crime to get the scam approved. Or the fact that Chicago’s Red Light Cameras are actually causing more accidents than they are preventing. The answer – all of the above.

In a scandalous front page report from the Chicago Tribune’s Sunday edition, the publication blew the whistle on Mayor Rahm Emanuel’s ‘Red Light Camera’ program. The Mayor has been pushing the costly plan since his election as a way to raise money for the city and to cut down on automobile accidents at the same time. The fact that it took a $2 million bribe to get the program approved and awarded should have been an obvious sign of bad things to come.

Red light cameras and accidents

The Tribune report pulls no punches and comes right out and portrays Mayor Rahm Emanuel and his staffers as liars at best, and criminals at the worst. The publication even lists a number of examples, and those are just from the Red Light Camera scandal. In the study of accidents at Chicago intersections with new red light cameras, the Tribune investigation found that accidents at those spots increased 5% since the automatic ticketing cameras were installed.

State Mandated Prevailing Wage Is A Bum Deal For The Collar Counties

Published by Illinois Review April 30, 2015
by Allen Skillicorn

The so-called “prevailing wage” sets a minimum hourly wage for skilled labor based on the cost of living for each of Illinois’ 102 counties. We would all agree the cost of living is lower in rural versus urban areas. The average family can buy a much larger home for the same amount of money in McHenry, Kane, Grundy, and Kendall Counties versus Cook County.

As it turns out, Illinois’ Prevailing Wage Law is a bum deal for these collar and ex-urban counties like McHenry, Kane, Grundy, and Kendall because residents still have to pay Cook County wages for all public projects.

Cook county prevailing wages.

Cook County prevailing wages.

Every year local municipalities are required to pass a prevailing wage ordinance. As you can see, in the charts below these wages are based on or directly tied to Cook County wages. Since taxpayers in McHenry, Kane, Kendall, and other counties are paying higher wages, their tax rates must go up even higher.

Kane County prevailing wages.

Kane County prevailing wages.

McHenry County prevailing wages.

McHenry County prevailing wages.

Kendall County prevailing wages.

Kendall County prevailing wages.

According to the non-partisan Tax Foundation, Illinois has 17 counties that rank in the top 100 nationally for the highest median effective property tax rates. *Notice that Cook County pays lower rates than these suburban and ex-urban counties.*