By: Ted Dabrowski*
A lethal combination of rising property taxes and stagnant incomes has forced many Illinoisans to rethink their relationship with their state. More than a million net residents have already fled the state since 2000 – and you can’t blame others for thinking about joining them.
Property taxes have become punitive in a great number of areas in Illinois. We’ve written about how these taxes have destroyed the equity people have in their homes in the south suburbs of Chicago. In other cases, high property taxes are squeezing seniors out of their homes.
The reality for too many Illinoisans is that incomes have been stagnant for years – and falling when you consider the impact of inflation. Median household incomes since 2000 have increased by just 24 percent, far short of the 38 percent inflation that occurred during the same time period.
All the while, property tax bills across the state have been rising at an unsustainable pace. In fact, since the year 2000, Illinois property tax bills have grown nearly four times faster than household incomes have.
According to data from the Illinois Department of Revenue, taxes per household have nearly doubled across the state, up 93 percent since 2000. In comparison, household incomes have grown just 24 percent.
That means more and more of Illinoisans’ hard earned incomes are going toward property taxes and less are going toward groceries, college savings, and retirements.
In 2015, 6.7 percent of household incomes went toward property taxes, up from 4.3 percent in 2000. On average that’s nearly $1,900 more per household.
Property taxes, County by county
Residents of Lake County pay the highest effective rate in Illinois when measured as a percentage of household incomes. In 2000, Lake County residents paid 6.5 percent of their household incomes toward property taxes.
By 2015, that number had jumped to 9.4 percent. The average Lake County property tax bill is now over $7,300 per household.
Overall, the collar counties pay the highest effective tax rates in the state. But it’s not just the Chicago suburbs that are taking a hit. Taxpayers statewide have seen their bills rise, too.
In fact, the four counties with the the biggest growth in their tax burdens, in percentage terms, are all downstate. Jasper County residents have seen their effective tax rates jump 85 percent since 2000. Residents in Pope County, have seen their rates go up by 75 percent. And the same goes for residents in Jersey county. Bond County residents are next with a 73 percent growth.
Paying more property taxes than anyone else
People have to scrape more and more of their money to pay for Illinois’ nearly 7,000 units of local government – the most in the nation – and the executive-style pay and ballooning pension payouts of the administrators who staff them.
It’s not surprising then, that Illinoisans pay the highest property taxes in the nation when measured by another metric: percentage of home values.
In fact, property tax rates as a percentage of property value in Illinois are already three times higher than in Indiana and two times higher than in Missouri.
Not only is it too expensive to live in Illinois, but it’s simply become too easy for Illinoisans to lower their tax bills by moving right across the border.
And if federal tax reform occurs, expect the rage against property taxes to deepen as it further exposes Illinois’ excessive property tax burdens.
You’d think with such a mess, spending reforms – from collective bargaining reforms to state mandate relief to 401(k)s to municipal bankruptcy protection – would be the linchpin of the legislature’s efforts.
Instead, all we’ve gotten is Rep. Michelle Mussman’s fake property tax freeze.
*Ted Dabrowski is President of Wirepoints.