Illinois’ so-called ‘property tax freeze’ legislation exempts Chicago Public Schools and city of Chicago

Senate Bill 484 would offer a freeze in name only, as it fails to address the very costs that drive up Illinois homeowners’ property tax bills.

A proposal to freeze property taxes statewide is making its way through the Illinois House of Representatives. Senate Bill 484 would freeze property taxes across the state from 2017 to 2020.

Notably, however, the bill exempts Chicago Public Schools and the city of Chicago from the property tax freeze.

In addition to carving out Chicago and CPS, the bill would allow a list of exceptions to the freeze, including debt payments and pension costs, making it doubtful the legislation would stop property tax hikes anywhere in the state.

SB 484 sailed through the Illinois Senate in May 2017, passing 37-11, with nine votes of “present.”

Homeowners in Chicago have been hit hard in recent years by massive property tax hikes. In 2015, the city of Chicago passed a $543 million property tax increase in order to pay for city pension contributions. In 2016, CPS raised property taxes by $250 million in order to pay for teacher pensions. Chicago property taxes are expected to increase by 10 percent for homeowners in 2017, with three-fifths of the hike coming from the CPS tax hikes, according to the Chicago Tribune. Even with the property tax hikes, CPS was forced to sell $387 million worth of bonds to JPMorgan in order to meet its June pension contribution deadline.

And despite property tax hikes and massive borrowing, the city of Chicago has implemented a torrent of new taxes and fees on basic services and goods.

Filed by Senate President John Cullerton, SB 484 would most likely not result in lower property tax bills. Cullerton, a Chicago native, sponsored SB 484 even though it leaves out Chicago homeowners, who – along with homeowners in the collar counties – pay some of the highest property taxes in the state, and in the country. Not only does the proposal leave out the single largest city and school district in the state, but it also fails to shield property owners from some of the very costs that are resulting in higher tax bills.

The proposal exempts from the freeze some of the biggest local costs, such as pension payments and debt payments. The plan also does nothing to address Illinois’ high number of local units of government. The Prairie State has nearly 7,000 units of local government, by far the most in the country and more than Indiana, Iowa and Kentucky combined. Texas has the second-highest with 5,147 local government units, despite the fact that the Lone Star State is larger than Illinois in both landmass and population.

With these exemptions in place and a lack of local government consolidation, this bill will not really freeze property taxes.

Rather, the plan entails a four-year property tax freeze that does not mandate any structural spending reforms, leaving the door open for local taxing bodies to borrow, spend reserves, or hike other taxes to raise desired revenue from taxpayers. And when the freeze ends, local governments will again be free to raise taxes.

Homeowners deserve real relief, including homeowners in Chicago. And that relief will only come if comprehensive property tax reform is implemented by reining in local government spending drivers.