NIU Economist: tax “Chill” not “Freeze”

NIU Economist Jeremy Groves talks with WNIU Radio about the current move to ‘freeze’ property taxes.  He liken’s it to a “chill” rather than a “freeze”.chill

NIU Economist: Property Tax Freeze ‘More Like a Chill’

Article b y Jenna Dooley, Northern Public Radio   WNIJ, WNIU, August 18, 2015

Illinois Democrats and Governor Bruce Rauner remain at a standstill over a new state budget.

Listen the the NPR Article:
Governor Rauner has been pushing for several overhauls including term limits, restrictions on civil lawsuits, and a hold on local property taxes. On Monday, he tweaked a property tax freeze proposal to include increased state funding for struggling schools.
“Property taxes are our number one problem tax, our most uncompetitive tax. The General Assembly has already indicated they are willing to pass a property tax freeze.”

Rauner voiced frustration after a property tax freeze measure in the Legislature didn’t include collective bargaining provisions.

He also tried to sweeten the deal this week by offering increased state support for high-poverty districts, including Chicago Public Schools.

The measures, which the Governor now wants as one package, face an uphill climb in the Legislature.

But back to the property tax proposal– when is a freeze really a freeze?

Northern Illinois University economist Jeremy Groves:

“They’re using the word ‘freeze.’ It’s really a chill. If there are increases, your property taxes aren’t going to increase as fast.”

He explains:

“The levy is basically the district saying ‘this is how much money we are going to need this year.’ Then what they do is they plug those into a fraction,” Groves said. “The levy is the top number, the total assessed value is the bottom number. You do the division and you get the extension– that rate. What the Governor is proposing is to take that rate number and freeze it for two years. That does not mean your property taxes will stay the same.”

So if your house increases in value, the property tax will still go up. If the house is worth less, there’s a good chance you could pay lower property taxes.   story continued

Original Article: