 Illinois’ extraordinarily high property taxes are a symptom of a serious
problem: too much spending that local governments cannot control.
But some claim Illinois’ high property taxes (and sales taxes) are the result of
the state having a lower-than-average income tax. But that’s not true.
Illinois’ property taxes are higher than the property taxes in every state that
has no income tax at all. Clearly, these states and many others are able to keep
their property taxes low even without income tax revenues. Illinois property
taxes are nearly triple those in neighboring Indiana, which also has a low, flat
income tax rate.
The breakdown
Nine states do not have an income tax. They are geographically, politically and
economically diverse. One thing they do share in common is that they all have
lower effective property tax rates than Illinois, according to a 2016 study by
wallethub.com.
The median home value in Illinois is $175,700 according to the wallethub.com
study. The annual property tax on the median home value is $3,959 per year at
Illinois’ average effective property tax rate. The same home would have
significantly lower property taxes in any of the states that have no income tax.
A homeowner with the same home value would pay $570 less in property taxes in
Texas, $2,000 less in property taxes in Florida and Washington, and $2,600 less
in property taxes in Tennessee.
Illinois is consistently in the top three highest property taxes in the country,
usually behind only New Jersey, which has a very high income tax rate. Illinois
has higher property taxes than all states that have competitive income tax
rates.
[to top of second column] |
 Indiana: A flat income tax neighbor with drastically lower
property taxes
One comparison that is closer to home for Illinois is Indiana, where
the statewide income tax rate is 3.23 percent, with some localities
also having income taxes. Illinois’ current income tax rate is 3.75
percent, with legislators talking about raising it as high as 5.25
percent. Despite having similar income tax rates, Illinois’ property
taxes are nearly triple Indiana’s property taxes on a home with the
same value.
The difference in property taxes between Indiana and Illinois
undoubtedly contributes to the flood of people moving across the
border from Illinois to Indiana. In the most recent year of data,
Illinois lost 20,000 people to Indiana, on net.
Illinoisans need property tax relief – and they can’t afford income
tax hikes
The property tax is the largest of all taxes collected in Illinois,
and is the most obvious symptom of Illinois’ governance and spending
problems. Some of the spending is driven by the decisions of local
political leaders. Much of it is also driven by state mandates for
collective bargaining with government unions, minimum manning rules,
prevailing wage laws, workers’ compensation requirements, and
pensions and education mandates, to name a few.
Illinois needs to solve the problem of skyrocketing property taxes,
because it’s threatening home ownership and home equity values.
Raising the income tax is not a solution, but allowing Illinoisans
to consolidate local governments and relieving local governments of
heavy state mandates is the only solution that will work.
Click here to respond to the editor about this article
|
