Written by Chicago Sun Times Contributor, Orphe Divounguy, chief economist for the Illinois Policy Institute,
Chicago and Illinois can’t tax their way out of this crisis. The only way property taxes can go down is for lawmakers to get the state’s biggest expense — public pensions — under control.
“There’s more than corn in Indiana,” a popular mid-1990s jingle proclaimed.
Weak housing market performance should at least mean property taxes won’t increase very much. But that’s not the case: since 2007 property taxes in Cook County have grown by 22% after adjusting for inflation.
Illinois has sacrificed the quality of its schools, public service and its economic stability in order to feed a beast with a bottomless appetite — public pensions.
Even with those sacrifices, it’s estimated Illinois’ five public pension funds are collectively short as much as $250 billion. Chicago’s city pensions are short roughly $30 billion. You pay for that each year in income and property taxes, but you’re also sacrificing growth in the value of your biggest investment.
Chicago can’t tax its way out of this crisis. Neither can the state of Illinois. The only way property taxes can go down — and homeownership can be worth the high monthly costs – is for lawmakers to do that aforementioned listening and get the state’s biggest expense under control.
Sustainable, real pension reforms could solve the problem once and for all — preventing the massive income and property tax hikes that are making Illinois homeowners grimace year after year.
So long as Illinois continues to pursue massive income and property tax hikes instead of necessary structural reforms, Illinoisans will likely continue to find better opportunities elsewhere and the housing market will continue to struggle.
That’s why Illinois needs real, substantive, and innovative reforms through a constitutional amendment. All stakeholders stand to benefit now while modest, commonsense changes can still stave off disaster.
By allowing for changes in future unearned benefits, the state could preserve existing retirement benefits and avoid devastating tax hikes and bankruptcy. In addition, the amendment would allow for changes such as increasing the minimum retirement ages and capping pensionable salaries that lead to multimillion-dollar payouts over time.
There’s more than high taxes in Illinois: world-class sports teams, museums, conservatories, zoos, Michelin-star restaurants and gorgeous beaches of our own. Topping that list are our friends and loved ones.
Those are the things that make Illinois home. You should fight for your home.