By: Mark Glennon*
Cook County Assessor Fritz Kaegi spoke this week about property taxes to south suburban homeowners.
The primary solution he focused on, according to the Chicago Tribune, is the Fair Tax — the progressive income tax increase proposed by Governor JB Pritzker. “No area of the county or state has more riding on passage of the Fair Tax Amendment than the Southland,” Kaegi said.
Few things are as easy to debunk than the claim that the Fair Tax would materially reduce property taxes. The numbers are simple. The Fair Tax simply wouldn’t raise enough to lower property taxes meaningfully. In any case, it has already been earmarked for other things several times over. And there’s the obvious matter that a new tax just isn’t a solution for the fundamental problem: high overall tax burdens.
Property tax collections are far larger than commonly known – by far the biggest source of revenue in the state. They total about $31 billion — $20 billion from residential and $11 billion from commercial and farming. That’s 50% more than the combined revenue of the state’s personal and corporate income taxes.
But the Fair Tax would raise just $3.4 billion, optimistically projected by its proponents. That means even if every penny of the Fair Tax went to property tax relief, property taxes would drop by less than 11%. That’s not much consolation for anybody in Illinois, especially Chicago’s south suburban residents. They would need a cut of over 76% just to get down to the national average, which is 1.2%. Those communities have been pummeled by impossible property taxes harder than any others in the state. Average, effective rates there exceed 5% per year.
More importantly, the $3.4 billion of new Fair Tax Revenue has already been promised away on other things, several times over. Pritzker and other supporters have said the new money will cover the increased cost of the new school funding plan, reduced pension debt, paydown of the backlog in unpaid bills and elimination of the structural budget deficit. Those total over $10 billion. The only property tax relief he has identified is an increase in a $100 million increase in the property tax credit available on income taxes, which is a pittance.
Meanwhile, the so-called “task force” on property tax relief appointed by Governor Pritzker continues to meet. The only reported action it has taken is rejection of the most obvious reform needed – a ban on lawmakers running tax appeal practices on the side. That task force has 88 members and seven subcommittees, comprised of mostly the same folks from the political establishment who created our crisis.
Kaegi apparently wasn’t the only officeholder peddling the sham relief at the town hall this week. State Rep. Debbie Meyers-Martin (D-Olympia Fields) said at the meeting, “Finally, we’ve got some order and strategy to the conversation we’ve been having for years in the south suburbs.”
No, Ms. Meyers-Martin, you don’t. You have nothing.
A tax increase isn’t a solution for high taxes. The solution, instead, is the catalog of major reforms we’ve advocated for here, including real pension reform, changes to collective bargaining laws, prevailing wage reforms and much more.
*Mark Glennon is founder of Wirepoints.
Read more about Illinois’ property tax problems:
- It’s not just property taxes Illinoisans should be worried about. It’s home values, too.
- Report: Nine Illinois cities among top 50 national housing markets “turning ugly”
- Chicago’s south suburbs struggle under Springfield’s continuing neglect
- Sticker shock: Some New Trier residents stunned by property assessments
- Illinois’ lethal combination: Rising property taxes and stagnant incomes