High inflation could lead to property tax hikes in Illinois
Decades-high inflation means local governments can easily raise Illinoisans’ property taxes by 5% during the next year. That makes it an especially bad time to compound the property tax hike with Amendment 1.
Illinoisans’ property taxes could increase 5% starting in 2023 as local governments consider raising rates by the maximum allowed level to offset losses from decades-high inflation.
Truth in Accounting founder Sheila Weinberg said Illinois experienced 7% inflation in 2021, the highest level reported since the state instituted a property tax cap in 1991. The Property Tax Extension Limitation law prevented local leaders from raising property tax rates above the annual rate of inflation, up to a maximum of 5%.
The Truth in Accounting website explained inflation has increased by an average 2.2% annually in Illinois since 1993, reaching a 4% high during the Great Recession in 2008. Weinberg said local leaders can now vote to raise those rates “even more than the already high amount they see now.”
“With inflation as high as it is, local governments will now have the option to increase property taxes to that [maximum] level,” Weinberg told The Center Square. “They can do this just by a vote from the village board.”
But if voters approve Amendment 1 on Nov. 8, a conservative estimate shows property taxes would increase at least $2,149 during the next four years. Because the change to the state constitution greatly expands government union bosses’ ability to make demands over a wider range of topics, the property tax bite could be much greater.
Amendment 1 expands the bargaining power of government union bosses to negotiate over a near endless array of subjects, ultimately forcing residents to pay the bill for costly contract concessions that carry more weight than state laws.
With decades-high inflation already driving up the costs of everyday goods on Illinoisans, higher property taxes promise to push more residents out of the state by making housing less affordable. Adding the Amendment 1 tax burden to the load local taxing bodies are expected to impose thanks to inflation is a lot to ask of stretched family budgets.
How will amendment 1 affect your property tax bill?
This tool uses compound annual growth rates in the All-Transactions House Price Index by the Federal Housing Finance Agency for Illinois counties from 2010-2021 to project future home values through 2026. To project property tax bills through 2026, the tool uses the compounded annual growth rate in median property tax rates for Illinois counties, calculated using 1-year and 5-year U.S. Census Bureau American Community Survey estimates from 2010-2020.