House Republicans’ 4-year property tax freeze fails homeowners
Local spending drivers need to be reformed to truly relieve taxpayers of Illinois’ highest-in-the-nation property taxes.
Two-thirds of Illinois voters don’t want an income tax hike as part of the state budget, according to a recent poll conducted by Fabrizio, Lee & Associates and commissioned by the Illinois Policy Institute. Three-quarters of respondents oppose hiking sales taxes. And nearly 80 percent agree “Illinois state lawmakers should pass major structural reforms before passing any tax increase.”
Illinoisans’ message is clear: They want a budget that delivers structural reforms, not tax hikes.
So why are Republicans willing to impose billions in income and sales tax hikes on struggling Illinois in exchange for a half-baked property tax freeze?
GOP lawmakers’ latest proposed budget relies on at least $5 billion in new tax revenues from new sales taxes and a four-year temporary income tax hike.
In exchange for hiking Illinoisans taxes by billions of dollars, the GOP plan freezes property taxes for four years.
That’s a bad deal no matter how you look at it. Illinoisans need real relief. They shouldn’t have to pay billions of dollars of extra income taxes just to get a freeze on the highest property taxes in the nation.
And what’s worse, the freeze isn’t even absolute. Local debt service payments are exempted, meaning homeowner’s taxes could still rise if local officials say property tax hikes are necessary to pay down debt.
Most importantly, neither the freeze nor the Republican plan as a whole addresses what’s been driving up Illinoisans’ property taxes in the first place: local government overspending, unfunded mandates and state subsidies.
Any property tax relief to taxpayers will be short lived because the plan doesn’t enact any structural spending reforms to either state or local spending.
Local governments will draw down reserves, borrow more or hike other taxes and fees during the freeze to maintain their current level of spending. Or they will simply hike property taxes again when the freeze expires in four years. Either way, Illinoisans’ local tax burdens will grow.
Unless lawmakers reform the spending that drives property taxes higher – from the most units of local government in the nation, to the seventh-highest workers compensation costs, to state-subsidized spending – Illinoisans will never get permanent relief from their property tax burdens.
It’s the only permanent way to bring Illinoisans’ property tax bills down.