 Illinois residents have the highest property tax rate in the nation. Over the
past 50 years, property taxes in Illinois have grown 2.5 times faster than
inflation and 14 times faster than the state’s population. Since 1990, property
taxes have grown 3.3 times faster than Illinoisans’ median household income.
Illinois residents need a break. And a property-tax cap could protect
Illinoisans from taxes growing faster than their paychecks year after year.
Indiana’s property tax cap: A model for Illinois
Indiana adopted its property tax cap law in 2008. The law limits how much
property taxes can be raised on taxpayers, and requires the government to seek
voter approval before raising revenues above the tax caps. In 2010, Indiana
voters adopted the tax cap as an addition to their state constitution.
Tax limits
The reform puts three tax caps on the assessed value of property: a 1 percent
cap on homestead property, a 2 percent cap on agricultural land and a 3 percent
cap on commercial property. For example, if a taxpayer’s personal property is
worth $100,000, then the amount of taxable money is capped at no more than
$1,000.
Tax credits
If the tax levy in an area causes the property tax bill to be more than the cap
allows, then the law requires a credit to be given back to the property taxpayer
in the form of a tax deduction. This tax deduction is reduced from the local
government’s share of the revenue.
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 Voter referendum required in order to raise taxes above cap
If a unit of government wants to collect more than what the tax cap
allows, the constitutional amendment provides it may do so provided
it receives permission from voters via a referendum to raise the tax
caps for a certain amount of time.
How could Illinois benefit from a property-tax cap?
Both residents and business owners would benefit from the protection
a property tax cap provides. In fact, it would provide similar
benefits as a taxpayer bill of rights because it would restrict
politicians from suddenly imposing higher property tax rates on
residents. Taxpayers would not have to worry about their property
taxes rising out of control, as they are now in Chicago. A cap would
allow homeowners and businesses owners to plan with more certainty
for their long-term tax liability.
The implications of a property-tax cap
Implementing property tax caps would restrict the amount of revenue
a local unit of government could collect. Therefore, in order to
allow local governments to operate without continually raising
taxes, they need to have the power to control or reduce their
operating costs. A good place to begin would be by reforming
collective bargaining and workers’ compensation laws, which drive up
the cost of government
Illinoisans need tax relief. Implementing a property tax cap would
be a good step in the right direction.
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