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 Illinoisans are still paying the second-highest property taxes
in the nation, according to a recent study.
In an annual analysis of the property taxes in all 50 states and the District of
Columbia, finance website WalletHub placed the Land of Lincoln at 50 out of 51.
This is the second year in a row the study ranked Illinois’ property taxes
second-highest in the nation. New Jersey took the top spot both years.
The average U.S. household pays $2,279 in property taxes each year on a home
valued at $193,500, the nation’s median. But Illinois homeowners pay nearly
double that amount, at $4,476, for an identically priced home. The median home
value in Illinois is $179,700, lower than the nation’s median. Still, Illinois
homeowners average $4,157 in property taxes on that home.
While Illinoisans have no shortage of financial reports to remind them of their
big tax burden, property taxes remained largely absent from Gov. J.B. Pritzker’s
Feb. 20 budget address.
The governor declared, “Workers deserve an income tax cut and a property tax
break,” only to present a graduated, or “progressive,” income tax structure as
the means for achieving those goals.
In reality, a progressive tax would do nothing to lower property taxes in
Illinois. In fact, all seven states with zero income tax – Texas, Florida,
Washington, Alaska, Nevada, Wyoming and South Dakota – each enjoy lower property
taxes than Illinois. New Jersey’s progressive income tax structure, meanwhile,
has failed to rescue residents from a property tax burden that ranks highest in
the nation, according to the WalletHub study.
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The cause of Illinois’ daunting property tax bills
is not the state’s flat income tax, as Pritzker suggests. Rather,
Illinois schools’ and municipalities’ massive, unfunded pension
liabilities have forced local leaders to continuously hike property
taxes to cover those costs.
In 1996, property taxes in Illinois hovered around the national
average. But as pension obligations for government workers have
skyrocketed, so too have Illinois taxpayers’ property tax burdens.
Pension costs have taken about 50 cents of every property tax dollar
raised during the past two decades.
Growing pension costs are crowding core services
out of local budgets. As a result, Illinoisans are left shouldering
sky-high property tax bills.
Pritzker should instead encourage state lawmakers to amend the
Illinois Constitution to allow local governments to get their
pension costs under control. An ideal pension amendment would
protect already-earned pension benefits, while allowing for
adjustments to the growth of future benefit accruals, such as
cost-of-living increases pegged to inflation.
Without sensible pension reform, Illinoisans will continue straining
under heavy property tax bills.
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