Illinois homeowners need relief, but don’t be duped by fake property tax reform

Effective property tax reform must rein in the government costs that drive up taxes.

The pain

For Laura and Phil Valdez, property taxes are as burdensome as a second mortgage.

“It’s gone from frustration to fear,” Laura said. “Are we even going to be able to sell our home when someone does the math on the taxes?”

“Since we moved in, our house’s value is down $90,000, but the property tax bill has doubled.”

The Valdezes aren’t alone. The couple lives in Sandwich, Illinois, but the pain they feel spreads across the state. More than 200 miles away, lifelong Belleville resident Kris Armstrong is seeing property taxes take a toll on his community as well.

“Just in our neighborhood alone we have more than 100 homes that have been empty since 2008, and that hurts home values for people who stay,” Armstrong said.

“The foreclosure rate is terrible, and I think property taxes are a primary reason for that, because people can’t sell their houses.”

And don’t think central Illinois is immune from punishingly high property taxes.

Brandon Bordner grew up in Decatur in the 1990s and remembers when the town was still thriving. Those days are long gone. But while the city has taken a dive, property taxes haven’t.

The house his parents have listed for just over $100,000 comes with nearly $4,000 in property taxes each year.

“It definitely comes into play,” Bordner said. “It’s going to be a lot of leverage to the buyer in negotiating: ‘You want to get rid of this house, but I can’t get approved to pay that much per month.’”

The posturing

Illinois homeowners have reached a breaking point. They pay the nation’s highest property taxes, and nearly 1 in 5 are seriously underwater on their mortgages, according to RealtyTrac. That’s the second-worst rate in the country – behind only Nevada.

And lawmakers are taking note. Property taxes are at the center of the debate that rages on in Springfield.

But instead of taking the steps necessary to cut bills, too many lawmakers are playing political games, hoping to slide past voters reform that doesn’t actually ease the pain, but is sufficient to secure politicians’ re-election.

Don’t be fooled.

A case in point is a bill advanced by state Rep. Michelle Mussman, D-Schaumburg. While parading as reform, the legislation would actually raise property taxes on many homeowners. That’s because it doesn’t go after any of the cost drivers that are forcing up taxes. Instead, Mussman’s plan would just increase exemptions.

Expanding exemptions doesn’t stop the rising cost of government. Mussman balks at going after the real problem: bloated government.

Illinois has too many duplicative units of local government paying unaffordable salaries and pensions to the government workers who run them. Those governments dole out overly expensive perks to employees through collective bargaining. Governments pay inflated wages for construction projects, which raise costs far higher than what taxpayers can afford. And they’re getting whacked with runaway workers’ compensation costs.

In the face of all this, Mussman’s bill does nothing.

Powerful reforms

The Illinois Policy Institute has laid out a three-step plan for comprehensive property tax reform in Budget Solutions 2018. The plan begins with a property tax freeze.

Second, it eliminates many of the state subsidies that fuel excessive spending at the local level, propping up salary spikes, pension sweeteners and workers’ compensation costs that would otherwise be unaffordable.

And finally, it repeals expensive state mandates that jack up the cost of local government services with no benefit to residents.

Real solutions mean fundamental reforms to the way local government operates. Illinoisans don’t have time for more political plays.