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PRITZKER
WANTS LOCAL GOVERNMENTS TO USE COVID-19 MONEY FOR PROPERTY TAX RELIEF
Illinois Policy Institute/
Noah Shaar
With billions in federal COVID-19 relief
earmarked for Illinois schools and local government, Gov. J.B. Pritzker
pushed them to use the money to lower or freeze property taxes. He made
no mention of the state’s role in pushing property taxes to the
second-highest in the U.S. |
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 The federal government is handing Illinois schools and local
government a “boatload” of money for COVID-19 relief, and Gov. J.B. Pritzker
said the money should go to property tax relief.
“This is a great year for local communities to consider freezing or lowering
their property taxes,” Pritzker said Aug. 17. “Why is this a good year to do
that? Schools received not only increased funding from the state of Illinois but
received a boatload of support from the federal government as well. And they
also received a lot of support for local infrastructure … Those are things that
take local properties taxes, typically, to pay for them.”
Federal relief funds include about $5 billion for the state’s schools. Schools
account for about two-thirds of the average property tax bill. Local governments
will receive about $5.9 billion and public transit, including airports, will see
nearly $1.9 billion.
The state is getting $8.1 billion, some of which Pritzker intended to use to pay
off the short-term loan Illinois obtained from the Federal Reserve – the only
state to use the emergency lending. When federal regulators said the pandemic
money could not be used for debt, Pritzker switched almost exactly the debt
amount to infrastructure spending, which freed other state funds to repay the
Fed.
Republicans blasted the infrastructure plan as riddled with pork projects.
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Illinoisans pay the nation’s second-highest
property taxes, according to a 2021 ranking by WalletHub. In 2021,
Illinois homeowners averaged $4,942 in property taxes for the U.S.
median valued home of $217,500, double the national average property
tax bill.
While Pritzker may want the influx of federal funds
to give temporary relief from high property taxes, the state is to
blame for decades of underfunding education and for setting pension
rules that give local governments almost no flexibility to control
mushrooming public pension costs. Local governments in Illinois hold
a combined $63 billion in pension debt. Pensions eat the bulk of
many Illinois cities’ property tax revenues, and almost 40% of
education spending goes to pensions.
Pension debt, unless reformed, will lead to more tax hikes that in
turn cause residents to leave the state. An Illinoisan with a
$217,500 home would save $3,089 per year in property taxes by moving
to Indiana, a state unplagued by high pension debt.
The long-term solution to high property taxes is pension reform,
which is only possible if Illinois amends its constitution. If
lawmakers can pass a pension reform amendment, then they will give
property taxpayers some real and lasting relief. |
