Property values declined throughout the State of Illinois during the real estate recession, but property tax levies did not.
In fact, 2010 statewide property tax levies were up nearly $4.8 billion above 2005 figures. In Chicago and the suburbs alone, property tax levies increased by almost $3.5 billion during the same period. The data from 2010 is the most recent available.
Illinois faces a number of daunting challenges in regard to its fiscal condition according to a Report of the State Budget Crisis Task Force.The Report says the State of Illinois has:
The lowest bond rating of all fifty states
The nation's worst unfunded pension liability ($85 billion)
Approximately $8 billion in unpaid bills
According to the Report, Illinois has compounded its challenges with poor fiscal management. At the onset of the 2008 financial crisis, the state was essentially insolvent. In the years leading up to the crisis, Illinois borrowed and shifted money without providing sustainable resources to pay for ongoing commitments.
"Budget gimmicks became a standard practice. The state has perennially pushed its bills off to the future. Illinois has been doing backflips on a high wire, without a net," the Report said.
When the state budget is in the red, it impacts revenue sharing with local governments. As a result, local governments must increase property taxes, cut spending, or both.
The state's heavy reliance on property taxes to fund schools is problematic. School taxes usually account for two-thirds of all property tax bills.
Illinois has the third highest number of school districts of all states. More than 200 of Illinois' 868 school districts have only one school. Last year Governor Quinn proposed consolidating the number of school districts to 300 and formed a commission to study the issue, estimating that Illinois could save $100 million per year. However, implementation of the plan and potential savings are at least a year away.
Budgeting for Property Taxes
The ongoing fiscal problems facing local taxing jurisdictions, coupled with an overall lower base of taxable assessed value, adds to the uncertainty of future tax rates. It makes it difficult for property owners to adequately budget for property taxes.
This situation of rising tax levies clearly demonstrates why a fair and equitable level of assessment on your property is now more critical than ever. It's the best way to help control future property tax expenses under these troubling financial times for state and local governments.