Illinois’ property tax rates have skyrocketed since 2010, according to new analysis done by the Tax Policy Center. The survey examined the 23 Illinois counties with populations exceeding 65,000.
The average property tax rates as a percent of home value has soared from 1.93 percent in 2010 to 2.28 percent in 2012. This represents an 18 percent property tax rate increase in just two years. This rate spike is due to declining home values and local taxing bodies increasing property tax levies.
Illinois’ property tax rate is second only to the rate New Jersey residents pay, which is 2.32 percent annually.
A tax rate of 2.28 percent is equivalent to paying $6,840 in annual property taxes on a $300,000 home. According to the Tax Policy Center, the average Illinoisan had an annual property tax bill of $4,469 in 2012.
This is in stark contrast to the rest of the country. The Tax Policy Center concluded “… the bulk of counties levy property taxes that are around $1,000 per homeowner and below 1 percent of house value.
”Illinois’ high property tax trend has been going on for some time. For the five-year period of 2007-2011, Illinois stands out as one of a few states that saw a majority of its counties asking citizens to pay a property tax rate of more than 1.5 percent.
Illinois officials must do better in controlling the property tax burden on residents and businesses, or else the state’s economy will suffer and Illinois will continue to lose residents to other states. From 1995 to 2009, Illinois lost 806,000 people to out-migration and $26 billion in taxable income.
In other states, hard property tax caps have helped limit property tax bills from growing uncontrollably. In 2010, Indiana voters passed a constitutional amendment that limited property taxes to “one percent for residential homesteads, two percent for commercial property and second homes, and three percent for industrial and agricultural property.”
By empowering voters to limit the taxing and borrowing powers of local governments, Indiana has successfully held the average property tax rate below 1 percent.
Hard property tax caps such as Indiana’s are long overdue for the residents of Illinois.