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Today’s number: $30 billion

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* AP

Illinois could lighten its property tax burden by consolidating governmental taxing districts, standardizing property-value assessments, tightening up the appeals process and reining in breaks on commercial redevelopments, according to a draft report obtained Tuesday by The Associated Press.

The unpublished report, required by state law signed last summer by Democratic Gov. J.B. Pritzker, found that Illinois hauls in $30 billion a year, or 38% of the total taxes collected, from a system put in place when the state was founded on its agricultural economy. Now it’s best known as the nation’s next-to-costliest, behind New Jersey. […]

Income-producing properties, which change hands much more infrequently than homes, where sales data can be utilized in assessments, poses another problem. The task force recommended that building owners submit the income and expense data for their business properties to give assessors more accurate information.

More accurate assessments at the front end should reduce the staggering number of assessment appeals. But the report said higher standards should apply to appeals. Outside data, it said, have indicated that appeals often result in much greater reductions for high-value properties than lower-valued ones, relative to cash value.

To put that number into context, state government revenues totaled about $41 billion last fiscal year, which isn’t much more than the locals collected.

As we discussed yesterday, the draft report is here.

posted by Rich Miller
Wednesday, Jan 8, 20 @ 11:17 am

Comments

  1. School districts take the biggest share of property tax revenue and there’s probably a limit to how much money school consolidation would save, even if such consolidation were politically feasible.

    Comment by PrairieDog Wednesday, Jan 8, 20 @ 11:24 am

  2. Back office consolidation is long overdue. We can keep lots of units of local government serving the same people and paid for by the same people. But the school district, library, park district and village do not all need their own administrative staff, HR department, communications / graphic designer, procurement team, law firm, accounting firm, etc. And forcing shared services to happen will reduce budgets, inevitably. There should be one capital improvement plan for all public buildings in each township, for example. One HR department. One shared software license. There’s a lot of duplication happening now. We can’t afford it anymore. (My two cents as a local elected official).

    Comment by Dan Johnson Wednesday, Jan 8, 20 @ 11:43 am

  3. “probably a limit to how much money school consolidation would save”
    … uh, this is a pretty trivial statement. I mean, there’s a finite of money spent on schools, so that would be the absolute limit.

    Comment by Perrid Wednesday, Jan 8, 20 @ 11:43 am

  4. When you look at property taxes and the distribution of those monies, the glaring number that folks see is K-12 education school districts.

    The funding of K-12 education, locally, through property taxes is a model predicated on two end goals these districts need;

    * Minimum “per pupil” funding that meets the minimums needed.

    * The wants/needs of parents/families for the children attending these schools.

    The pension crisis included, I look at these issues as a bottom line / end game of school funding and the manner to do so being as important of a key as any.

    My question is this;

    What do we need to do to make education funded at minimum levels that also allows property tax relief, without increasing the burden disproportionately to the relief we seek with property taxes?

    If wealthier areas/districts would like to increase revenue, avd have the real means (wealth) to do that *above* minimum expectations for all districts, have at it.

    This;

    ILLINOIS CONSTITUTION, ARTICLE X

    EDUCATION

    SECTION 1. GOAL - FREE SCHOOLS

    A fundamental goal of the People of the State is the
    educational development of all persons to the limits of their
    capacities.

    The State shall provide for an efficient system of high
    quality public educational institutions and services.
    Education in public schools through the secondary level shall
    be free. There may be such other free education as the
    General Assembly provides by law.

    The State has the primary responsibility for financing
    the system of public education.

    Let’s look at this, with a property tax eye, to grasp how we all can seek property tax relief to meet our constitutional goal.

    Comment by Oswego Willy Wednesday, Jan 8, 20 @ 11:47 am

  5. Look at Illinois state spending on K-12 in the last 30 years then look at Illinois property tax levies over the last 30 years.

    Hiking the income tax will not lower property tax levies. Period.

    Comment by Tawk Wednesday, Jan 8, 20 @ 12:02 pm

  6. People in Chicago and Cook county think they are paying high taxes, but they are much lower then similar properties in the collar counties. In Elgin, for example houses in Cook pay one amount. Meanwhile an identical house (built by the same builder) a few hundred feet way in Kane county pays much, much more. (Same school district, same city streets, same police and fire departments, same everything except amount of taxes.)
    The question comes to mind, if everything is merged and equalized, would Kane county taxes go down or would Cook county taxes go up?

    Comment by DuPage Wednesday, Jan 8, 20 @ 12:02 pm

  7. Mr. Johnson - add policing to your list of shared services. Does every taxing body have to create it’s own police force? I’ve lost count of the number of different policing agencies in Sangamon County and I suspect other counties are similar.

    Comment by Out Here In The Middle Wednesday, Jan 8, 20 @ 12:04 pm

  8. Sounds like the local income tax is right around the corner — with manadated cut in residential real estate taxes.

    Comment by Annonin Wednesday, Jan 8, 20 @ 12:07 pm

  9. === Hiking the income tax will not lower property tax levies. Period.===

    (Sigh)

    It’s never going to be a full swap, a zero sum outcome.

    Thinking that isn’t working the problem.

    Comment by Oswego Willy Wednesday, Jan 8, 20 @ 12:08 pm

  10. Out Here In The Middle

    So I can be out of the way, please let us know when you start the discussion of county police department with appointed chief v. county sheriff’s office with elected sheriff.

    Comment by Anyone Remember Wednesday, Jan 8, 20 @ 12:09 pm

  11. It would be an interesting study to see what the savings were from the consolidation of local governments when all of the local agencies in Louisville KY metropolitan area were consolidated into a single government.

    There may have been some small savings but I dare to say not very much. All of the services that were being provided were switched to the larger municipal government. All of the employees were moved from 1 payroll to another. If anything, the bureaucracy got bigger.

    Comment by Huh? Wednesday, Jan 8, 20 @ 12:16 pm

  12. =Hiking the income tax will not lower property tax levies. Period.===

    Hiking property taxes on commercial and residential owners who disguise their property values will.

    Comment by njt Wednesday, Jan 8, 20 @ 12:18 pm

  13. It is incorrectly and misleadingly said that New Jersey property taxes are higher than Illinois. The statement is justified with the fact that New Jersey residents, on average, pay an annual amount of real estate taxes that is higher. However, what isn’t said is that New Jersey property values are much higher than Illinois. The New Jersey median home sale price is $335k vs $202k for Illinois.

    A New Jersey homeowner who owns a $320k house will pay about $6-7k in real estate taxes annually, while the same homeowner in Springfield, or Decatur, or Peoria will pay $7-8k, or about 17% more.

    The collar counties and downstate Illinois have the highest property taxes in this country, and it isn’t close.

    Comment by Merica Wednesday, Jan 8, 20 @ 12:22 pm

  14. “The State has the primary responsibility for financing
    the system of public education.“

    Such a key reason laid out for a graduated income tax, put forth by our state’s most important document, its constitution. It points us in the direction of change—the need to shift the burden more toward state income tax revenue, which would lessen the property tax funding burden proportionally. We are dead last in state education funding ratio for K-12.

    We have to be change people and not keep relying on a system that is very out of balance, wherein people with the lowest incomes keep taking on the biggest tax burdens. These points will hopefully be driven home in the upcoming Fair Tax campaign.

    Comment by Grandson of Man Wednesday, Jan 8, 20 @ 12:23 pm

  15. ==It’s never going to be a full swap, a zero sum outcome.==

    That’s not how my locally elected officials and their acolytes have been selling this. At all.

    I do agree people need to understand the equation. If the state is going to raise everyone’s income tax $1 for every 50 cents they give back in property taxes reductions, people should be aware of that. Then people can determine whether or not that makes their home more “affordable”.

    Comment by City Zen Wednesday, Jan 8, 20 @ 12:29 pm

  16. === That’s not how my locally elected officials and their acolytes have been selling this. At all.===

    Really? Do share…

    Comment by Oswego Willy Wednesday, Jan 8, 20 @ 12:31 pm

  17. ==Merica==

    Property tax as a percentage of home value is the most commonly used metric when comparing across geographies. Current look here:

    https://www.usatoday.com/story/money/2019/02/11/property-taxes-us-state-state-look-what-youll-pay/38909755/

    Comment by Stormfield Wednesday, Jan 8, 20 @ 12:31 pm

  18. As I noted yesterday, I think the report is a waste. Having read through it, I think the purported savings are disingenuous.

    Tinkering with the appeals process as recommended is treating the symptoms of a much larger problem. Cleaning up appeals doesn’t shrink the amount of property tax collected, it only redistributes who pays it.

    The same goes for more accurate assessments… it doesn’t change the need for property tax revenue, it only changes who is picking up the tab.

    As to consolidations, smaller taxing districts into larger ones has other effects on personnel costs, which are usually the largest budget items. When you move employees from small units of government into larger ones, the reality is the larger units pay more for labor per hour. That’s a very real reality whether it’s a drainage district to county, townships to county, small schools to large, etc. The comparables in public labor contracts show bigger organizations pay more. Thus, in many cases there has to be sufficient overhead savings to save on the labor side at the end of the day. That doesn’t always happen. The forced 911 dispatch consolidations have shown this.

    And for good measure, after promoting consolidation in the report, the State still recommends Townships do the assessing of property, but also increase their training requirements, as if this will create cost savings.

    If anyone had half a brain, they’d be tying a property tax swap into the progressive income tax to get buy-in. I had other points from yesterday’s post on this junk report, but won’t rehash them all.

    Comment by Shemp Wednesday, Jan 8, 20 @ 12:35 pm

  19. Stormfield: I agree with you. The numbers in the link you shared include Chicago. Chicago property taxes are much lower than the rest of the state (about 1.5% of the property’s value) vs 2.3-2.8% for downstate.

    you know what real estate in Illinois is taxed very low? lower than any other land in the midwest? farmland. increase property taxes on farmland (80% of the land are of this state) and you fix the whole thing

    Comment by Merica Wednesday, Jan 8, 20 @ 12:46 pm

  20. What concerns me most about these consolidation plans, is that not once are SSA’s mentioned. Those are probably some of the first taxing bodies that would be consolidated.

    SSA’s are generally created for specific subdivisions, usually on the higher end of the wealth scale, to provide amenities not available in the rest of the area. It’s like a HOA, but with more legal standing and one that shows up as a line item on your property tax bill - unlike a HOA.

    Consolidating such funds would spread the total cost to the entire area instead, which greatly reduces the ‘burden’ on the wealthy homes previous in the SSA, while increasing the burden on the middle and lower class homes who are now paying for the costs of what are usually luxury amenities not even in their neighborhoods.

    So call me a skeptic that this is being done for concern for the taxpayers. Or more specifically that it is being done out of concern of all taxpayers, because it clearly would benefit the most wealthy taxpayers.

    Comment by TheInvisibleMan Wednesday, Jan 8, 20 @ 12:49 pm

  21. Evidence based solutions indicate if you cant lower property taxes and you’ll just have to lower K-12 spending. This research was provided by the 12 brilliant souls that make up the morning coffe club.

    Comment by Blue Dog Dem Wednesday, Jan 8, 20 @ 12:54 pm

  22. === Evidence based solutions indicate if you cant lower property taxes and you’ll just have to lower K-12 spending.===

    Yeah, show your work, but take ALL the time you need, no rush.

    - City Zen -

    Which “locally elected officials and their acolytes” are you speaking of, I’m quite intrigued, or are you keeping it hush-hush.

    Comment by Oswego Willy Wednesday, Jan 8, 20 @ 12:58 pm

  23. The report is a joke and so are most of the ideas contained in it. The task force was formed with the mission to ease the property tax burden. Outside of consolidation nothing in that report will do that.

    As to the Assessor’s bill to create “more accurate assessments” his recommended changes won’t do that. Income produced by a property is irrelevant to the appeals process. The market value is supposed to be determined by what similar properties would command at market. He has aggregate data for that already and has requested a drove of additional documents for the appeals process. All that bill would do is mandate that business owners turn over more sensitive documents to the county (whether or not they choose appeal), create an unfunded mandate for the State’s Attorney to fine property owners, and create a larger bureaucracy within the Assessor’s Office.

    He already can’t process FOIA requests (let alone appeals) within the statutorily mandated time frame but now he is going to take in and process IRS documents for every income producing property in Cook County? Ok. If anything this increases the property tax (and appeals) burden not decrease it.

    Comment by Boone's is Back Wednesday, Jan 8, 20 @ 1:09 pm

  24. Grandson @12:23. Is that a guarantee from you that we will see property tax relief if this tax passes? If so, count me in.

    Comment by Blue Dog Dem Wednesday, Jan 8, 20 @ 1:10 pm

  25. ===Is that a guarantee from you that we will see property tax relief if this tax passes? If so, count me in.===

    No because it has nothing to do with property taxes. From pages 9-10 of the report:

    “Most recently, analysis by the Civic Consulting Alliance, buttressed by reporting by Pro Publica and the Chicago Tribune found that in Cook County lower valued-properties were over-assessed relative to higher-valued properties and that residential properties were overassessed relative to commercial properties. This had the effect of shifting the cost of government services from high-value owners to low-value owners, and from commercial properties to residential properties. Geographically, these researchers and reporters found that the downtown business district paid too little in taxes relative to true property values while the neighborhoods, especially lower-income neighborhoods, were overtaxed. This instance highlights how failures in the tax system can result in tax bills that are unrelated to a property owner’s ability to pay. It also shows how unjust the process can become.”

    Comment by njt Wednesday, Jan 8, 20 @ 1:16 pm

  26. The report may not offer a perfect solution but let’s get this started. Remember the journey starts with the first step. Agree with Don Johnson that consolidation may be a great first step and should definitely save money. Also look at funding for schools. It may need to move from the property tax to local taxes (for example in AZ there is a state sales tax and county sales tax so in Maricopa county you pay 11.2% in taxes). It would share the cost around and for seniors it may control some of their costs.

    Comment by illinifan Wednesday, Jan 8, 20 @ 1:27 pm

  27. ===There is no press to watch them===

    That’s not a problem with townships. That’s a problem with your local area.

    Get rid of the township, and that same behavior will just move to the county, or wherever else is left.

    Participatory government means just that. If local residents just sit back and do nothing and do not get involved in their own governance, well what you described is the consequence of that.

    Stress to your local population the importance of being involved in their own governance. If they choose to take a pass, the fingers of fault point at them.

    Comment by TheInvisibleMan Wednesday, Jan 8, 20 @ 1:31 pm

  28. If you want save money then by all means dissolve or consolidate units of government and eliminate the work they did. /s

    =But the school district, library, park district and village do not all need their own administrative staff, HR department, communications / graphic designer, procurement team, law firm, accounting firm, etc. And forcing shared services to happen will reduce budgets, inevitably=

    Why stop there? Make McDonalds and all of the other fast food places consolidate all of their admin and make the big mac $.15 again.

    Given that you tried to give your misguided statement some credence by adding that your an elected official only makes me think what ever office you were elected to should be the first to go.

    Comment by JS Mill Wednesday, Jan 8, 20 @ 1:32 pm

  29. TheInvisibleMan - “That’s not a problem with townships. That’s a problem with your local area.” - Au contraire!

    In 1999 the Illinois Press Association members did a one-off where on the same day in all 102 counties FOIAs were filed at the ” … county clerk, jail, city clerk of the largest city and superintendent of the largest school district … .” Read the link below. And it has only gotten worse. Townships can violate the law in plain sight (almost always due to error), and there is no one from the traditional press to see it. Abolishing them is a step towards increasing visibility and accountability and compliance with the law. https://www.newspapers.com/newspage/77790822/

    Comment by Anyone Remember Wednesday, Jan 8, 20 @ 1:54 pm

  30. ===Many of them are inbred dunghills staffed with barely literate hicks that hire their relatives===

    Not in my county. And uh, oh yeah, by the way… Bite me.

    Comment by Ducky LaMoore Wednesday, Jan 8, 20 @ 2:03 pm

  31. When we decide what services we want to fund with our tax dollars, we can consolidate those government bodies which provide services we no longer want. When the State adequately funds education, property taxes can be reduced. Funding both education and infrastructure grow economies. The choice is ours with the Fair Tax Referendum.

    Comment by Froganon Wednesday, Jan 8, 20 @ 2:12 pm

  32. Illinifan, moving school funding away from property tax to a local income tax is simply doubling down on the idea that your zip code should determine the quality of your education. Poor communities will continue to see their schools crumble. I’m certainly not a fan of funding schools with local property taxes, but I fail to see how a local income tax would fix the inequities of our school systems in this state.

    Comment by Seenitall Wednesday, Jan 8, 20 @ 2:17 pm

  33. Just eliminate the property tax. All $30 billion should be covered through higher income taxes. Let the state collect and distribute. We are paying it anyway, and income taxes are a much fairer and more transparent way to collect revenue than property tax. It’s also a way to deal with district by district school funding disparities, and homeowners will not have to worry about future tax increases they may not be able to afford.

    Comment by West Town TB Wednesday, Jan 8, 20 @ 2:53 pm

  34. = Just eliminate the property tax. All $30 billion should be covered through higher income taxes. Let the state collect and distribute. =

    Interesting idea - that’s a way to eliminate the overhead associated with administering the property tax. No more township assessors, no more unfair assessments, no more tax appeals. Of course this stands no chance of happening as long as a very prominent tax appeal attorney, Speaker Madigan, is still around.

    Comment by cover Wednesday, Jan 8, 20 @ 3:07 pm

  35. === We are paying it anyway, and income taxes are a much fairer and more transparent way to collect revenue than property tax.===

    That is absolutely incorrect. You can deduct expenses and other items from your income taxes. Property values are much more transparent and less subjective, making the property tax less regressive. Remember that Donald Trump had a stretch of years where he supposedly paid 0 in income taxes…

    Comment by Boone's is Back Wednesday, Jan 8, 20 @ 4:04 pm

  36. @Boones- Because Trump never found a way to game property taxes.

    https://www.propublica.org/article/trump-inc-podcast-trump-tower-tax-records-reveal-new-inconsistencies

    Property taxes “aren’t regressive.” Good one.

    Comment by DIstant watcher Wednesday, Jan 8, 20 @ 4:16 pm

  37. “….property taxes are less regressive.” Boone is back has it completely wrong. Property taxes nad sales taxes are the “most” regressive forms of taxation. Because they have no basis on the ability to pay as a factor. Social Security recipients and other retirees still pay property taxes. High sales tax in Cook County is paid by everyone, but, the poor pay a much higher percentage of their income in this and property tax too.

    Comment by qualified someone nobody sent Wednesday, Jan 8, 20 @ 4:34 pm

  38. ==== Because they have no basis on the ability to pay as a factor====

    hmmm… yes they do. If you have the ability to pay for a million dollar home you likely have to ability to pay for the tax bill on it. Properties that are valued less obviously have a lesser tax bill.

    Sales taxes and the like are regressive. They affect everyone, regardless of the ability to pay.

    Comment by Boone's is Back Wednesday, Jan 8, 20 @ 4:50 pm

  39. Seenitall, you are correct. Agree school funding should be equitable but if tax is county wide, then all schools in the county would get a share helping poor and rich communities. It does not address how to fund schools in poorer counties. Possibly a mix of increased funding and local taxes not linked to property tax. If property taxes decline I would expect housing prices to increase helping homeowners build wealth. Not sure on the mix but it needs to change from what we have.

    Comment by illinifan Wednesday, Jan 8, 20 @ 5:08 pm

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