You probably recall the firestorm that erupted in May after we wrote about a proposal by three Chicago Federal Reserve Bank economists for a statewide property tax dedicated to Illinois pensions. Many shared our view that the idea was inhumane and foolish. Some communities ran ballot initiatives in opposition, which passed easily, hoping to head off any real discussion of the idea.
You’d think the overwhelming opposition would have ended the discussion. It hasn’t.
At least several very highly influential people continue to talk up the idea, including at least one with influence on Governor-elect Pritzker’s transition team. We have learned that from separate, reliable but confidential sources.
The initial paper on the idea proposed a charge of one percent of home value per year, across the state. As now being discussed, the rate might be lower, we are told, and there might be exemptions for communities that already have exorbitant property tax rates. That doesn’t change our view that it’s a horrible idea.
The express thinking behind the proposal is to seize property value because it can’t flee the state. “Current homeowners would not be able to avoid the new tax by selling their homes and moving because home prices should reflect the new tax burden quickly,” the authors wrote.
Governor-elect Pritzker should be asked to disavow the idea and commit to opposing it.
Same for the two institutions that first provided a public forum for the idea – The Federal Reserve Bank of Chicago and The Civic Federation. Though neither of them officially endorsed or opposed the idea, it was at their jointly-sponsored conference in April that the proposal was first presented.
They should be put on the spot and asked to condemn the concept. The longer it has life the more property values suffer, so kill it.
–Mark Glennon is founder and Executive Editor of Wirepoints.