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illinois property taxes
Most Illinoisans pay more in property taxes than they do in state income tax. Voters around the state will be asked to consider 120 tax-related referenda in the March 15th primary election, over three-quarters of which are property tax hikes – including bond issuances totaling an eye-popping $572 million. Illinois homeowners pay the second-highest property taxes in the nation, surely a contributing factor to our also having the second-highest outbound migration of any state in the union. Sadly, this hasn’t led to bureaucratic belt-tightening. Property taxes have skyrocketed in recent years (see chart), outpacing inflation by double digits. According to the latest data available from the Illinois Department of Revenue, local governments collected $27.7 billion in property taxes in 2014 – 40 percent more than the state income tax brought in that year, at a time when the state income tax was at an historic high.
It’s no secret that Illinois is home to more units of government than any other state in the union. In fact, over 6,000 property taxes are levied in Illinois. Despite being nothing new (the practice of local governments taxing property took place during our days as a territory, pre-dating even our statehood), the possibility of a property tax freeze is very real for the first time thanks to Governor Bruce Rauner championing the issue.
On the low end, a question in Champaign County would raise taxes on the average homeowner by about $2 a year. Conversely, Lake County’s North Shore School District No. 112 is seeking approval to issue $198 million worth of bonds. This referendum is the largest to appear on an Illinois ballot in a decade and would translate into an additional $20,000 owed by the average homeowner over the 30-year life of the bonds.
About half of the tax-related referenda are designed to raise a property tax rate. Any unit of government in any of Illinois’ 102 counties which increases its property tax levy by more than 5% must hold a special public hearing that requires a published notice, thanks to the state’s Truth-in-Taxation Law. Within counties – Cook, the collars and 33 others – governed by the Property Tax Extension Limitation Law (PTELL), commonly referred to as “tax caps,” non-home rule taxing bodies (e.g. counties, fire protection/school/library districts, townships, some municipalities, etc.) are only allowed to increase their property taxes by the lesser of 5% or inflation (0.7% in 2015) and an additional increase must be approved by referendum. Three Cook County villages are seeking to become home rule by referendum next month and, thus, be allowed greater authority to impose new and higher taxes without voter approval.
The 24 new and increased sales tax referenda would be in addition to the $1.4 billion collected in fiscal year 2015 by existing local sales taxes, which is in addition to the 20% of the state sales tax diverted to local governments. It’s worth noting that, according to the non-partisan Tax Foundation, only five states have more sales tax jurisdictions than the nearly 450 that are locally-imposed here in the Land of Lincoln. (Spoiler alert: only one is a more populous state.)
It’s not all bad news, though. Thanks to a citizen-initiated petition drive, over 100 volunteers gathered some 2,000 signatures to place an advisory referendum on the ballot in Will County’s Homer Township. The referendum, unlike any other in the state, asks voters if local governments should “be required to seek voter approval by referendum prior to increasing its annual total property tax levy.” In other words, it asks if folks are in favor of a property tax freeze as proposed by Governor Rauner.
Given the stiff increases homeowners have had to swallow lately, it’s highly probable that most folks in Homer Township, and across Illinois, would agree. Elected officials should embrace Governor Rauner’s call for reduced mandates, consolidation and other cost-saving measures in order to alleviate the property tax burden. Taxpayers are clearly fed up with ever-increasing property taxes and politicians who resist a property tax freeze or cut do so at their own political peril.
2016 primary election referenda by the numbers:
Property taxes: 62
Bond issuances: 31
Sales taxes: 24
Home Rule: 3
Total tax-related referenda: 120
Largest bond issuances:
I. $198 million
North Shore School District No. 112
Lake County
II. $65 million
Community Consolidated School District 181
Cook & DuPage Counties
III. $40.9 million
Monticello C.U.S.D. No. 25
Champaign, DeWitt & Piatt Counties
IV. $39 million
Plainfield Public Library
Kendall & Will Counties
V. $34.5 million
Hillsboro C.U.S.D. No. 3
Bond & Montgomery Counties
VI. $27 million
Burbank School District No. 11
Cook County
VII. $22 million
Village of Brookfield
Cook County
VIII. $18.8 million
Village of Green Oaks
Lake County
IX. $18.565 million
Metamora Township High School District No. 122
Tazewell & Woodford Counties
X. $17.5 million
Oak Park & River Forest Consolidated High School District No. 20
Cook County

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