Progress Illinois

This week property tax bills hit mailboxes across Cook County and many property owners were justifiably outraged by their skyrocketing rates. Elected officials all tried to dodge responsibility for their role, including Mayor Daley, who certainly deserves his fair share of criticism (after all, his extensive tax increment financing system deprived local taking bodies of $552 million last year alone.) The mayor tried unsuccessfully to pass the buck to Assessor Jim Houlihan. Houlihan, in turn, pointed to House Speaker Michael Madigan (D-Chicago) for opposing an extension of the 7 percent tax cap, which sunset this year. But it's the SouthownStar's Phil Kadner who hits the nail on the head, noting that the state's regressive tax policy is the real culprit:

All Daley has to do to lower property tax bills in Chicago is to tell the school board (which he controls) to cut the school system's levy in half. He's not going to do that, of course [...]

Why hasn't that happened?

Because new tax money would have to be generated to replace the lost money from the property tax. The Legislature would have to increase the income tax, the state sales tax and maybe both.

Some folks would say that makes for a fairer system because those taxes are based on income, the amount of money people earn and on how much they spend.

As we've pointed out repeatedly, Illinois' regressive tax structure places a larger burden on low- and middle-income families. Because of the flat income tax rate, the lack of any sales tax on services, and the heavy reliance on property taxes and goods-based sales tax revenue, the lowest 20 percent of income earners face a higher tax burden than their counterparts in 45 other states.

The school system's over-reliance on property taxes only exacerbates the problem. Kadner points to families in Ford Heights, where the property-tax base is low and the median home price is $29,000. Homeowners in the south suburb (who are typically of modest-incomes) face a 20 percent tax rate this year, most of which will go to their severely underfunded local schools. Meanwhile, in the North Shore's Winnetka, where homes go for $900,000 on average, the property tax rate (5.5 percent), is significantly lower. "Poorer communities, mainly in the south suburbs, need to really sock it to their residents to pay for schools, police, and fire protection," Kadner writes. And when you stack the schools up, it becomes clear that despite having to dig deeper into their modest budgets, $7,466 less is spent on the typical high schooler in Ford Heights compared with Winnetka.

State Sen. James Meeks' (D-Chicago) HB 174 would addresses the need for both income and property tax reform and it would generate an additional $3 billion a year to finally adequately fund schools once the state budget is balanced. Illinois' taxpayers can't afford to keep waiting for this sort of fair tax reform.