Illinois has the dubious distinction of having the second-highest property tax burden in the nation. Only New Jersey has higher property taxes, according to the Urban-Brookings Tax Policy Center.
It's an especially tough situation for corporate property owners in Cook County, who are assessed at a much higher ratio level than homeowners. Commercial and industrial properties are assessed 150% higher than residences based on the differences in the assessment ratios from the classification system. This disturbing trend has made professional tax management a necessity for companies trying to hold the line on their tax expense.
It will be especially true this year for commercial and industrial property taxpayers in the Cook County south suburban townships, which historically have some of the highest local tax rates in the state. The assessor is conducting a triennial reassessment for this area of the county in 2014.
Property taxes are a critical revenue source for local governments. In recent years, they have accounted for approximately three-fourths of local tax funding.
At the state and local level, more tax revenue is collected from property tax than from any other source, according to the Tax Policy Center report.
Values May Decline - Taxes Don't
With the recent economic downtown, there were significant declines in property values. However, property taxes continued to soar in many Illinois jurisdictions due to local government spending that causes local tax rates to rise each year.
Brian Costin, director of government reform for the Illinois Policy Institute told the Chicago Magazine, "Most local taxing bodies charge the maximum increase they can do under law each year." He explains that taxing bodies are asking for more of a share on property assets, even though the asset's value has dropped.
Costin says there's another way that rising property taxes are hurting the real estate market. Corporations may relocate to a lower-tax state due to considerations not only for their own rising tax bills but for those of their employees too.
Ultimately, Costin predicts Illinois is on its way to eclipsing New Jersey on property taxes. "A couple more years like this and we could be number one. But it's not a number you want to be."