Union pay raise could force Kane County property tax hike

Union pay raise could force Kane County property tax hike

As Kane County officials prepare for union contract negotiations, county taxpayers might soon be bracing for higher property taxes.

As part of ongoing renegotiations over Kane County union contracts that expired in 2017, county officials are thinking about worker pay raises – and how to afford them.

But even a modest raise for union workers will likely mean a heightened toll on county taxpayers.

The Kane County Finance Department reported March 27 that a 1 percent raise for county employees would demand $868,000 from public coffers, according to the Daily Herald. However, a corresponding 1 percent hike in property taxes would yield only $496,000, leaving a remaining $372,000 unaccounted for. An additional $236,000 in unappropriated contingency funds could be tapped, but barring spending cuts, this would still leave the county short. Unless the county offsets the cost of union pay raises by reducing spending elsewhere, property taxes are likely to rise by more than just 1 percent.

However, a 1 percent increase may be too optimistic for Kane County taxpayers. The Daily Herald reports that in recent years, union negotiations with Kane County have “resulted in nothing less than 2 percent raises for union employees.”

Illinoisans already pay some of the highest property taxes in the nation. But few feel the pinch quite like those in Chicago’s collar counties, who bear among the heaviest property tax burdens in the state – and therefore, the country. Residents of Kane County are no strangers to these costs, shouldering the fifth-highest median property tax rates in Illinois. Median property tax bills for Kane County homeowners exceeded $5,700 from 2011-2015, according to data from the U.S. Census Bureau.

And trends show that this burden has only worsened over time. A 2015 Illinois Policy Institute study found that property taxes in Kane County grew by nearly 48 percent between 2000 and an average of years 2009-2013.

A ceiling on the county’s taxing authority does exist, however. Absent a voter referendum, state law limits property tax increases to the lesser of 5 percent or growth in the Consumer Price Index, the Daily Herald points out. Voter approval would be required before hiking levies any higher.

But taxpayers already appear to have already voted – with their feet. Kane County has shed 12,900 people on net to other counties since 2010, according to U.S. Census Bureau data.

While Kane County ended 2017 with a budget surplus, earlier deficits plunged county finances into a midyear shortage and threatened to jeopardize the budget for 2018. Only after introducing steep spending cuts and abandoning planned projects were officials able to find their fiscal footing.

Employee salaries and wages are one of Kane County’s biggest line items, consuming 25 percent of the budget for fiscal year 2018. The Daily Herald reported that Kane County officials said in October 2017, that “any [pay] raises might trigger job cuts to free up cash for the remaining staff.”

The power gap between government-worker unions and the taxpayers who subsidize them has yielded ill returns for the latter. Collective bargaining laws in Illinois give public-employee unions disproportionate negotiating power, through which contracts are often finalized with little regard for public finances. As a result, local governments lift property tax levies to cover the cost.

At present, there are virtually no limits over what can be negotiated, including wages, hours and paid time off. Nor are there limits on the length of contracts, which have at times been as long as 10 years, with annual increases to income and benefits locked in. Meanwhile, taxpayers are left with the bill.

Pursuing collective bargaining reform is one of many routes lawmakers could take to deliver property tax relief. Kane County residents must pressure state and local lawmakers to keep the cost of government in line with their ability to pay for it.

If any lesson is to be learned by state and county outmigration patterns, it’s that an inability to rein in spending results in an inability to retain taxpayers.

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