Ep. 57: The $2B small business tax hike on Illinoisans’ ballots

Ep. 57: The $2B small business tax hike on Illinoisans’ ballots

New research from the Illinois Policy Institute projects that commercial property taxes for Illinois businesses will grow to almost $2 billion by 2026. Amendment 1 on the Nov. 8 ballot would likely increase that amount even more. Illinois Policy Institute Vice President Austin Berg explains why Amendment 1 would make Illinois’ notorious business climate even worse.

Is it a coincidence that Cook County homeowners and commercial property owners won’t get their second property tax bills until Thanksgiving this year, weeks after the election? Or is that just politics?

Whatever is behind the delay, property taxes will be at the top of the Nov. 8 ballot in the form of Amendment 1, which would increase taxes for property owners.

Timeline: The second installment of property tax bills in Cook County usually arrive in July and are due in August, but not this year. Here’s the calendar of events:

  • Early voting opened Sept. 29.
  • Midterm election: Nov. 8.
  • Property tax bills will arrive around Thanksgiving with an estimated return date of Dec. 31, 2022.

Convenient (for elected officials), huh?

Up and to the right: Property taxes have been rising for decades in Illinois and without significant property tax or pension reform, property taxes can be expected to continue to rise. Currently, property taxes are on pace to rise by $2,100 for the typical homeowner during the next four years.

But it won’t just be households that pay higher property tax bills: property taxes on commercial properties have skyrocketed, too. If tax increases continue at their recent rate, commercial property owners will shell out an additional $1.8 billion in annual property taxes by 2026, with the bulk of the increase – $1.6 billion – paid in Cook County.

For individual commercial properties across Cook County, property tax hikes will vary widely by region. Commercial properties on the South Side of Chicago could pay an estimated additional $10,179 in property taxes by 2026. Properties in central Chicago could pay nearly $100,000 in higher property taxes during the next four years.

That won’t do anything to help curb the exodus of major businesses moving jobs out of the state.

Ballot issue: Property taxes are top of mind as voters consider the fate of Amendment 1. The proposal would lead to ongoing property tax hikes as government union leaders’ demands drive up the cost of government.

The increase in property taxes could wind up being much worse if Amendment 1 passes. The measure would allow government unions to make demands outside the normal scope of bargaining, strike if their demands are not met, thwart simple pro-taxpayer reforms, crowd out government services for special interest causes and exacerbate corruption in Illinois.

Amendment 1 is a referendum on taxes in Illinois more than anything else. If property taxes simply continue to rise at their historical rates, businesses across the state will be asked to pay $1.8 billion in higher property taxes annually by 2026. Should government union bosses exercise new powers granted through Amendment 1, the tax hike on Illinoisans could wind up being far more costly.

Business owners feel the burden: Linda Ekendahl of Edible Arrangements: “I hope the property taxes don’t push me out into that level where I’m going to have to move because moving a business is also expensive. I’m hopeful it will work out, but I might have to be creative.”

“I was hoping that having a mortgage payment would be my security and that paying it off would help me in a sense of having something for my future. I want to leave a legacy for my son. I’ve been doing Edible Arrangements for over 18 years, but the thought of paying around $3,000 a month in taxes, every single month, is a lot of money that I could have used to pay for a property or several properties. I thought buying was a pretty smart move, but I didn’t realize how costly the property taxes would be.”

“It’s a constant conversation. Even in our Facebook groups, people are always talking about their property taxes rising a ridiculous amount. It’s never like $1,000 or $500. It’s always like something obscene and astronomical.”

What’s the cost?
Don’t forget, if property tax rates simply continue to increase at their long-run average rate, the typical homeowner will pay over $2,100 more in additional property taxes during the next four years.

How will amendment 1 affect your property tax bill?

Enter your county and home value above
If Illinois voters pass Amendment 1 in November, you can expect to pay in higher property taxes over the next four years.

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.

Amendment 1 could cost typical families: 

  • $2,935 more in property taxes in Cook County.
  • $2,125 more in property taxes in DuPage County, $2,256 more in Kane County, $2,330 more in Lake County, $2,626 more in McHenry County and $2,046 more in Will County.
  • $646 more in property taxes in Madison County and $834 more in St. Clair County.
  • $869 more in property taxes in Sangamon County, $1,012 more in Champaign County and $1,003 more in Rock Island County.

Voters have until polls close on Nov. 8 to cast their vote on this amendment. Unfortunately, Cook County voters won’t see how much their property tax bills have gone up until weeks after the election is over.

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