 But Hatchett is now planning to leave it all behind. The culprit? Property
taxes.
“You’re told all your life: Be educated, be successful, work hard and buy a
house, but we’re being abused for doing so,” Hatchett said. “Living in a town
like Flossmoor, it’s just not worth it.”
She’s not alone.
Illinoisans pay among the highest property taxes in the nation, according to the
nonpartisan Tax Foundation. Some Illinoisans’ property-tax bills are more than
their mortgage payments. And the squeeze is getting worse.
Since 1990, the average property-tax bill in Illinois has grown more than three
times faster than the state’s median household income, according to Illinois
Policy Institute research.
While Hatchett estimates the value of her home has been slashed in half over the
past decade, her property tax bill has only gone up. She paid more than $18,000
in property taxes last year — well over 5 percent of what she thinks her house
is worth.
Hatchett plans to move to Indiana, where taxes on residential property are
capped at 1 percent of the value.
Seventy miles from Hatchett’s home, in the northwest Chicago suburb of Crystal
Lake, Cassandra Bajak thinks this coming Christmas will be her two children’s
last in their home. Since she and her husband, an Army veteran, built the house
in 2002, their property-tax bills have doubled — eclipsing their mortgage
payments.
Her family now is choosing between a move to a southern state or downsizing in
their community.
“We’re being taxed out of our home,” Mrs. Bajak said. “The only reason we would
ever leave our home or this state is property taxes, and that’s what’s going to
happen.”
In McHenry County, where the Bajaks reside, property taxes eat up nearly 8
percent of the median household income. What’s worse, Illinoisans aren’t getting
much bang for their tax bucks.
Property taxes at the municipal level have not been going to fund spotless roads
or other public works. Instead, they’re mostly funding out-of-control pension
costs.
Just take a look at Springfield, where 98 percent of the city’s 2014 property
tax levy went to pensions. And where, from 2000 to 2014, members of the typical
household have seen their property-tax bill grow more than twice as fast as
their income.
[to top of second column] |
 Despite that, city-worker retirements are still in jeopardy.
While taxpayers have more than doubled their contributions to the
local police and firefighter pension systems over the past decade,
Springfield’s police pension fund has a mere 53 cents in the bank
for every dollar it needs to pay out future benefits; for
firefighter pensions, only 45 cents.
Forcing homeowners to keep shoveling more property tax dollars
into broken pension systems has become a morally bankrupt solution
to the problem.
In Springfield, for example, residents already contribute four times
more money into police, fire and municipal employee pensions than do
the employees.
The problem is that, in Illinois, state politicians mandate pension
benefits for local government workers, with little regard to
fairness for local taxpayers.
Many communities would prefer not to pay the high cost of workers
enjoying early retirement ages, health insurance benefits normal
residents could never afford, and annual 3 percent cost-of-living
adjustments that private-sector workers could only dream of.
So how can the state protect homeowners?
Forcing local governments to begin to live within their means
through a property-tax freeze, as has been proposed by Gov. Bruce
Rauner, is necessary. But solving the root cause of the property-tax
problem will require further reform, such as moving all new
government workers from defined-benefit to self-managed retirement
plans, transferring the power to negotiate pension benefits down to
local leaders, and encouraging aggressive consolidation and
resource-sharing across units of local government. For some
communities, the only option to undo decades of mismanagement will
be bankruptcy.
Until sincere efforts are made at reform, Illinoisans will continue
to live in fear: taxpayers of being squeezed out of their homes, and
government workers of pension payments that may never come.
Austin Berg is a Chicago-based writer with the Illinois Policy
Institute who is writing for the Illinois News Network, a project of
IPI. Austin can be reached at aberg@illinoispolicy.org.
Click here to respond to the editor about this article |
