By: Ted Dabrowski and John Klingner
Homeowners hate high property taxes. The proof is in New Jersey’s recent election results, which you can read about in this piece from Wirepoints.
Here in Illinois, not only has Gov. J.B. Pritzker failed to address what is for many homeowners their biggest issue, but he’s made the property tax burden even worse. Under Pritzker’s leadership, the legislature has passed a slew of laws that will only increase property tax bills. We list several of the key items below.
Illinoisans are particularly sensitive to the issue given that the average property tax bill per household has far outpaced the growth in median household incomes by nearly three times over the past two decades. Talk to many people, and their property tax bills often exceed their mortgage payments.
Since 2000, property taxes per household have, on average, increased by 113 percent. Compare that to the 41 percent growth in Illinois median household incomes, or to inflation, which rose by 48 percent. Not only are Illinois incomes failing to keep up with inflation, but they are being eaten away by punishing tax bills.
About two years ago, Pritzker promised a task force that would reform and lower property taxes. And cut Illinois’ 7,000 units of government.
The commission was a flop. After blowing past their initial due date, the final draft of the report ended up as a hodgepodge of half-baked ideas and no firm solutions.
In the meantime, Pritzker and the lawmakers have been busy passing legislation that will only serve to drive property taxes even higher. The list below is just a sample:
- Granting additional sick leave benefits to teachers
- Hiking the pension benefits of Chicago firefighters
- Granting the Chicago Teachers Union additional bargaining powers
- Using taxpayer dollars to picking winners and losers in the EV industry
- Making Tier 2 benefits for local public safety more expensive
- Granting an expensive new contract to state AFSCME workers
- Restoring 6 percent salary spiking for Illinois teachers
- Expanding costs in healthcare by unionizing new workers
- Expanding Medicaid coverage to illegal immigrants
- Pushing a massive transformation of Illinois energy sector with incentives and subsidies
- Hiking Illinois’ minimum wage to $15
- And biggest of all, pushing a new ballot initiative that would cement union powers into the state constitution
Some will say that several of the above items have nothing to do with property taxes, but that’s a false assumption. The more money the state spends that it doesn’t have, the less it can distribute via grants to local governments.
The most consequential state funding goes to school districts, which are responsible for more than 60 percent of property taxes in Illinois. The less the state distributes in school aid, the more school districts raise taxes.
And it’s not just the state that’s responsible for those property tax increases. Some mayors like Chicago’s Lori Lightfoot have created damage of their own. Lightfoot granted the Chicago Teachers Union what she called the “most generous” contract ever, something Chicagoans can be sure of will increase property taxes. Her new 2022 budget, 60 percent larger than the city’s pre-COVID 2019 budget, will also herald in higher taxes as soon as the federal government’s free money runs out.
Illinois has a long history of putting a hurt on homeowners and renters by increasing property taxes at a pace Illinoisans could never keep up with. Wirepoints gathered tax and home price data going back to 1990 and found that residential property taxes per capita have grown at 2.5 times the rate of home prices in Illinois.
As a result, Illinois has been battling it out with New Jersey over which state burdens its residents more. In 2019, New Jersey edged out Illinois, according to the latest report from the Tax Foundation. New Jersey’s property taxes as a percentage of home values totaled 2.13 percent while Illinois’ was 1.97 percent.
Illinois’ neighboring states had far lower rates: Wisconsin (1.53%), Iowa (1.43%), Missouri (0.96%), Indiana (0.81%), and Kentucky (0.78%).
As our partner wrote, New Jersey has consistently punished incumbents for failing to do nothing on property taxes. Illinois lawmakers may want to take note.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Get the he^& out of Illinois. Doing just that.
Bingo.
No ifs ands or buts.
You stay in Illinois you will suffer unimaginable agony and garner no sympathy from the rest of America.
The list of what is generating higher costs shows that property tax increases aren’t going toward actual investments in the communities. Taxes are going up to satisfy the government class and whatever keeps it in power. The taxpayer loses leverage and will continue to lose it, unless they are part of the take.
Bigger governments in Democrat controlled states generally do not result in lower taxes.
The more powerful unions and special interests find ways to hike taxes.
Hmm! Isn’t Pritzker the billionaire who had his brother-in-law remove a toilet in an adjacent property so that he could get the property tax lowered? Ladies and gents, follow your governor’s example and remove all of your toilets forthwith. Return to the sanitation practices of yore. The chamber pot.
Check out Toiletgate Illinois. You will know the entire story. Here’s one. Sad part is he still got elected (sorry bought the election).
https://www.npr.org/2018/10/03/654201077/illinois-gov-candidate-removed-mansions-toilets-to-dodge-taxes-report-finds
when are you people gonna wake up and realize governor fat boy is doing NOTHING for the general populace,its all about free giveaways for the welfare sucking scumbags,WAKE UP DUMMIES!!!
And the price of homes is increasing dramatically, go figure. Put a house on the market in a decent suburb in Illinois today and you’ll have 6 showings a day and probably a bidding war. So I guess if you’re going to leave Illinois, do it now, probably no better time will come to sell. The price rises now will only give the state more reason to raise taxes later though,
I know if I cross state line houses in the state neighboring me are soaring in price too and are way higher than in Illinois. When you own property in Illinois it comes with the first mortgage owed to the pension systems. Like it or not, ones property secures the debts of the pension systems.
The price of homes in Lake / McHenry counties in Illinois are not increasing dramatically. Flatlined a year ago, and are still 10% or so below the 2008 peak. Most other major areas in the US are 2-3X the 2008 peak. Everywhere in the West other than San Fran and LA (Look ar Denver for example). Also, Texas and Florida are examples. To me, the very high property taxes, with more likely to come from this socialist D government and crazy school spending are the drivers of our stagnation.
Yes, Illinois price appreciation has been dismal, especially considering that we are still below the 2008 peak in many areas. But the insane price appreciation throughout the rest of the country is bad thing. That’s rampant inflation flowing from the river of money the Fed has been printing for a decade and a half. It’s cheap money flowing to corporations like Zillow, Redfin, iBuyers, Blackrock and local investors, and air B&B land barons, inflating prices so high that few can afford to buy except for those with access to that cheap Fed money. It’s been estimated that Zillow type buyers… Read more »
A vessel cannot quantify its own speed unless it has fixed points on the horizon against which to measure itself; home price appreciation must be analyzed on a relative basis. If one’s house in Detroit or Harvey, having dropped sharply in value, then rises 100%, one still cannot afford the conversion ratio to buy a house almost anywhere else.
Rising prices in depressed markets may be explained by utility value of the asset. In Woodstock, rental properties offer relatively high returns.
How much of that is a “dead cat bounce” of people fleeing Chicago for the suburbs, and how long can that be sustained? At some point all the people who want to leave Chicago and the close in suburbs and can afford to leave will have left, and then what?
Not complaining, since we left Silly-nois nearly five years ago now, but the haircut we took on selling our house in Will County makes me wonder when the market value of houses will resume its downward trend.
Run away as fast as you can before they take any more of your hard earned wealth!
It’s worse – I’m more concerned about my civil liberties right now.
Historical rise and fall of local property value relative to American property value. Woodstock Property Value dropped more after 2008 crash, and recovered extraordinarily less, than property values all over America. Woodstock property values are (-19%-23%) below pre-crash highs while America is up +44% We can compare the EAV (equalized assessed value; this number represents 1/3 of full fair market value) of Woodstock CUSD 200 taxing district performance to the Case Shiller Index home values performance in past 15 years. In Woodstock D200 taxing district the pre-crash EAV high water mark was $1.13B in 2009, low of… Read more »
What proportion of mean household income does Woodstock IL property tax obligation represent, relative to families all across America? Household income is the budget of a family. The family is required to make some expenditures (taxes), some other expenditures or savings are discretionary. What is the effect when a family budget must carve out 6.6% MORE than families all across America for mandatory property tax payments? In 2019 Woodstock, a $180,000 home would pay roughly $800 per month principal and interest mortgage obligations and $500 per month for property taxes. Compare that Woodstock resident’s $500/month obligation for p-tax… Read more »
AKA, get ready to take a haircut when you sell.
Most Americans can relate to “tax rates”. When you go to buy groceries, there is a sales tax rate applied to the amount of groceries purchased. The higher the purchase price of groceries, the higher the sales tax amount will be. Some people even cross State lines to get a lower sales tax rate on groceries or gasoline. When you buy groceries or gas, you might pay attention to a sales tax rate differential of 2%, and that would be on purchase amounts of at most hundreds of dollars. On a $100 purchase, a 2% higher tax rate would cost… Read more »
Serious question: What has Pritzker done at all to help the overwhelmed Illinois taxpayer?
Serious answer:NOTHING,but the mopes and dopes in this state will probably re-elect governor fat body
I use to give Pritzker the benefit of the doubt, thinking no one in his position could be that dumb. But I’m convinced now he’s just a shill.
This is & has been, the state of American politics…
Blazing Saddles-
https://youtu.be/A2oaTxPufOg
Harrumph.
THEY ALL TAKE THEIR PAY RAISES THO……..GREEDY FREAKS ARE RUNNING ILL
A task force! Harump Harump!
Tax Farce™
Taxes may be homeowners biggest issue but it isn’t a big enough issue for them to get off of their duffs and go vote for changes like people in other State’s dol
Don’t forget when the state consolidated pension assets of downstate safety personnel, they also enhanced their Tier 2 benefits.
Thanks, Nixit. We’ll add it. I’m sure there are more.