Illinois property taxes up 27% under Pritzker

The governor pins the issue on local governments, but state law and decisions contribute to the problem.

Gov. J.B. Pritzker isn’t as innocent as he wants us to think when it comes to Illinois’ property tax woes.

“I want to remind you that property taxes are not determined by the state of Illinois, but rather by local governments…including school boards, park boards, library boards, municipalities, etc.,” he said last month.

He put special emphasis on school boards.

Pritzker is right that local taxing bodies set levies, but suggesting those decisions have nothing to do with him is naive at best and dishonest at worst. State mandates, pension obligations and funding choices he oversees play a significant role.

Under the governor, property taxes have risen nearly 27% — from $31.8 billion in 2018 just before he took office to $40.37 billion in 2024.

State decisions shape some of the largest pressures behind those tax bills.

Illinois public schools are primarily funded by property taxes. But school districts are forced to rely so heavily on those taxes in part because the state diverts a growing share of its education spending to pensions instead of classrooms.

From 1996 to 2016, state education spending increased by $5.4 billion. But two-thirds of that growth, or $3.6 billion, went to pensions rather than students. During that time, pension costs grew from just over 8% of state education spending to more than one-third.

That trend has continued.

Since 2016, general fund payments to the Teachers’ Retirement System of the State of Illinois have grown 68%, outpacing the 55% increase in preK-12 education spending.

Pensions now consume nearly 40% of Illinois’ education budget. With more state money tied up in retirement debt, school districts are left to fill the gap at least in part with property taxes.

Some of those pension obligations were in place before Pritzker took office, but last year he signed a sweetener for Chicago’s fire and police pensions that will add an estimated $11.1 billion in liabilities by 2055. Roughly 80% of Chicago property taxes go to the city’s pensions.

In 2011 the state enacted the largest income tax hike in state history and kept 100% of the increase. At least some of that extra money could have offset rising property taxes.

Even the rules governing how property taxes can grow are set in Springfield. A report from Cook County Treasurer Maria Pappas found that state law has allowed property tax collections to rise at double the inflation rate over the past three decades.

Local taxing bodies operate within the framework created by the General Assembly and overseen by the governor. So how can Pritzker honestly say property tax bills have nothing to do with him?

State leaders have also failed to follow through on addressing property taxes directly. During the effort to move ahead a graduated income tax amendment in 2020, Pritzker pushed for a study on property tax relief as a key tradeoff. Only a draft report resulted, and it lacked substantive recommendations.

Between state and local decisions, Illinois residents have been stuck with the highest property taxes in the country, with the consequences are visible across Illinois: High taxes are driving residents and businesses to leave for states with lower costs.

Until the governor recognizes his part in the problem, Illinois residents can expect their tax bills to keep growing.