The Property Tax Con Game in Illinois

An excellent article by Phil Kadner, Chicago Tribune, Daily-Southtown, on the word games being played by our state politicians.Rauner, Derik Holtmann AP photo

Politicians who sit in our state capitol assume that voters are idiots. That’s why Republicans and Democrats alike will tell you they’re against increasing the property tax and the other party is not.

To understand what’s going on here, simply remember this — the state doesn’t get a dime from your property tax payment. All the money goes to local governments (counties, townships, municipalities, park and library districts), but most of it is used to finance the public schools.

Article by Phil Kadner Chicago Tribune, Daily-Southtown, May 19, 2015  Phil can be reached at  Photo by Derik Holtmann, AP

So governors and state legislators can talk about freezing the property tax or cutting it or limiting how much it can increase because it won’t impact how much money comes into the state treasury or how much they can spend.

They gain credibility by threatening to limit what other units of government can spend while spending this state into a black hole by failing to make legally required payments into the state’s pension systems.

Here’s another fact: Illinois relies more heavily on the property tax to fund public education than any other state. Despite a constitutional mandate that the state be the primary source of public school funding, it contributes less than 30 percent of the cost. That’s why property tax bills are so high in Illinois.

More revenue is generated by the property tax in Illinois than any other tax source. In addition, the system of assessing property is so complicated that homeowners and businesses are forced to hire lawyers to file appeals when they can’t understand why their tax bill is higher than their neighbors’ bills.

House Speaker Michael Madigan, D-Chicago, who’s also the state Democratic Party chairman, happens to be a partner in a Chicago law firm that makes a lot of money appealing property assessments for its clients.

This may or may not have anything to do with the state’s failure to spend more money on public education and the overreliance on the property tax system. But there have been numerous efforts to change that in Springfield, and they have repeatedly failed.

Former Gov. Jim Edgar, a Republican, actually destroyed one of his opponents, Dawn Clark Netsch, when she ran for governor advocating a cut in the property tax and an increase in the state income tax to finance the public schools. Edgar later favored such a plan, although it included a guarantee that the property tax on businesses would be cut, which he claimed Netsch’s plan did not include.

James “Pate” Philip, a Republican and the Senate president at the time (the GOP then controlled both the House and the Senate) killed Edgar’s property tax relief plan. One of his proteges at the time was state Sen. Christine Radogno, R-Lemont, who cast a deciding vote to kill the bill in committee. She is now the Illinois Senate Republican leader.

I hope you’re seeing a pattern here.

Former Gov. Pat Quinn, a Democrat, didn’t seem to care much at all about high property tax bills until he ran for re-election last year against Republican Bruce Rauner.

Suddenly, Quinn could be heard denouncing this state’s reliance on the property tax on TV news and radio interview shows across Illinois. He called the property tax burden on homeowners here the worst in the nation.

That’s the first time that any governor had said such a thing, so I give Quinn credit for that, although he cut the state’s contribution to public education, which forced many local school districts to increase their property tax levy, and the resulting bills, causing homeowners to scream in anger.

Property tax bills continued to go up even as property values declined during the Great Recession, another example of how complicated and confusing the property tax system is here in Illinois.

I’ve been writing about a lot of this stuff for more than two decades now and have listened as almost every state legislator and governor in Illinois has told people how awful the property tax system is and how they were going to do something about it if re-elected.

The only one who I believe actually tried was former state Sen. James Meeks, D-Chicago, who discovered what I had learned years before in dealing with politicians on this issue — they lie. Meeks is now president of the Illinois State Board of Education, appointed by Rauner.

Rauner, by the way, promised to freeze the property tax if elected. The governor has no power to do that, but he promised it anyway, despite a Democratic-controlled legislature that he called corrupt and unresponsive to the public’s will.

Illinois House Democrats craft their own budget plan
Illinois House Democrats craft their own budget plan
Now Rauner is the governor, and Madigan called a bill for a vote in the House to freeze the property tax. It failed. Republicans would not vote for it because it was not Rauner’s bill.

And Madigan sent mailers to the homes of voters in the district of state Rep. Mark Batinick, R-Plainfield, who failed to vote “yes” on Madigan’s bill, claiming that Batinick supports skyrocketing property tax bills.

A spokesman for Batinick said that’s not true, that Batinick is for real reform. He referred me to House Bill 136 as an example of the sort of thing that Batinick would support. Here’s the synopsis of that bill from the General Assembly website:
“Amends the Property Tax Extension Limitation Law in the Property Tax Code. Provides that if (i) the total equalized assessed value of all taxable property in the taxing district for the current levy year is less than the total equalized assessed value of all taxable property in the taxing district for the previous levy year, or (ii) the median equalized assessed value of all taxable property in the taxing district for the current levy year and the 2 levy years immediately preceding the current levy year is less than the median equalized assessed value of all taxable property in the taxing district for the 3 years levy years immediately preceding that 3-year period, then the extension limitation is (a) 0% or (b) the rate of increase approved by voters (instead of the lessor of 5% or the percentage increase in the Consumer Price Index during the 12-month calendar year preceding the levy year or the rate of increase approved by voters). Effective immediately.”

Yes, that’s confusing.

This state is trying to plug a roughly $6 billion hole in the current budget and also trying to find money to cover a projected long-term pension funding shortage of more than $100 billion, so most school districts are not planning on the additional revenue promised by the governor.

Illinois is in a financial mess, and corruption and mismanagement have had a lot to do with that. But the voters have been lied to repeatedly by everyone, particularly on the issues of school funding and the property tax system.

Any tax system ought to be simple to understand and have some connection to a person’s ability to pay. A person can only access the value of his or her property, or home, by selling it.

Many people in Illinois, particularly the elderly living on fixed incomes, have been forced to sell their homes because they can’t afford the property tax payments.

Young people are opting to leave Illinois because the property tax levels make home ownership prohibitive.

And business owners are closing their doors because property tax bills eliminate their margin of profit.Real tax reform is needed in this state to address the issues of a burdensome property tax system and the cost of public education.

But elected leaders don’t want to do that. They just want to continue playing this shell game, moving around the pea, knowing that voters will continue to play because the suckers are convinced that they know where the pea is this time.

It’s a trick folks. Plain and simple. Tell the politicians that you know a con when you see one.

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