Ep. 55: Yes, Amendment 1 will hike your taxes.
This week’s Policy Shop is by Senior Research Analyst Bryce Hill
If nothing changes, property taxes will go up by an estimated $2,100 during the next four years for the typical Illinois homeowner.
Policies that are already in place have led to pension debt and higher taxes. A typical Illinois family paid over $2,000 extra in property taxes under Gov. J.B. Pritzker. Amendment 1 would make it harder for anything to change, especially as related to Illinois’ worst-in-the-nation pension crisis. If passed, Amendment 1 would guarantee more property tax hikes.
What’s the damage? You can find out how much your property taxes would go up under Amendment 1 using our property tax calculator, but the statewide average would be $2,149 during the next four years.
That’s because Amendment 1 would hand government union bosses extreme powers to negotiate over a vast array of subjects. Taxpayers would be forced to fund those demands. Plus, if the bosses exercise those new Amendment 1 powers, the tax hike on Illinoisans could wind up being far more costly. It would allow government unions to make demands outside the normal scope of bargaining, strike if their demands are not met, thwart pro-taxpayer reforms, crowd out government services for special interest causes and exacerbate corruption in Illinois.
That endless loop of unlimited government union demands, higher government costs and rising taxes likely is why no other state has a similar amendment. Illinois voters will decide Nov. 8 whether to insert Amendment 1 into the state constitution, but what they truly will decide is the future of their property taxes.
Pension problems. Public pensions are making property taxes in Illinois among the most painful in the country. Today, pensions consume more than 25% of the state budget. In 2013, Illinois lawmakers took action to reduce the future growth in pension benefits, without reducing any earned benefits for retirees or current workers. Public Act 98-0599, resulting from the passage of Senate Bill 1, was originally filed by Democratic Senate President John Cullerton, sponsored by Democratic House Speaker Mike Madigan and signed by then-Gov. Pat Quinn, also a Democrat. The reform would have ensured the retirement security of pensioners without reducing earned benefits for workers and saved taxpayers billions of dollars annually.
While it was ultimately determined the 2013 reform would require changing the state constitution to be legal, government union leaders have continued to voice opposition to pension reform despite support of these reforms from rank-and-file members.
Without significant reform, Illinoisans can continue to expect to pay more and get less. Peer-reviewed research shows stronger government worker unions cause the cost of government to increase, with powerful unions putting even more upward pressure on benefits than on wages. Public retirement benefits, which flow mostly to union workers, have left Illinois’ local governments with $75 billion in pension debt and are already the primary cause of rising property taxes.
Inventing new problems. The right to negotiate in Illinois is already quite broad. Negotiations between the unions representing state and local government workers, including teachers, cover wages, hours and other terms and conditions of employment. Unlike most of our neighboring states, there are no limits to the wages and benefits government unions can demand. Amendment 1 broadens the scope of negotiations beyond wages and benefits to include “economic welfare,” which could open a vast range of topics to prolonged negotiations.
Opportunity for reform. On Nov. 8, Illinoisans will vote on this proposed change to the Illinois Constitution that would guarantee the pace of rising property taxes continues, block necessary reforms, invalidate hundreds of state laws, and would make Illinois an even worse place to do business. Amendment 1 is a referendum on taxes in Illinois more than anything else. It is a vote on whether Illinois property taxes should be higher.