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How to Fix Illinois Property Taxes? Task Force Has Ideas

by Philip Utterback, Chicago, February 2020

 

A legislative task force formed to study ways to reduce Illinois property taxes has released a draft report. Recommendations focus on ways to consolidate taxing entities, streamline appeals, and reform business tax exemptions.

 

A Big Problem

 

Illinois residents face the second highest effective property tax rate of any state in the country, according to the Tax Foundation. A USA Today story reported that, relative to property values, Illinois collects more than double the national median rate.

 

The task force draft explains that property taxes remain a problem because the state relies so heavily on them to fund public services. Property taxes fund the activities of just over 6,000 units of government, including 102 counties, 1,400 townships, 1,300 municipalities, 900 school districts and 2,200 other districts.

 

Consolidation

 

One area of opportunity for consolidation, according to the report, is school districts. The Government Consolidation Subcommittee, the School Funding Subcommittee, and the Social and Economic Disparities Subcommittee each recommend the consolidation of current districts into unit school districts, in which both primary and high schools are operated under the same district control. The Subcommittees believe this will help lower the property tax burden by reducing administrative costs that contribute to the levy.

 

Consolidation could also result in lower tax rates. The Assessments and Exemptions Subcommittee recommends sharing industrial and commercial values across the county for school funding, which would tend to reduce rates on commercial and industrial property in many districts.

 

Appeals

 

The Task Force calls for assessment appeals to be held to higher standards. Outside observers have found that appeals often increase inequality in the system by lowering assessments on high-value properties far greater than on low-value properties, relative to fair cash value.

 

The task force report says assessors should have better data to value properties. Also, all parts of the review process should have stricter deadlines and more resources so that assessments can be correctly set at objective fair cash value in a timely manner.

 

The Assessments and Exemptions Subcommittee recommends:

 

  • Fund the Property Tax Appeals Board (PTAB) to its required levels to complete its backlog of appeals

  • Explore the possibility of moving industrial and commercial appeals in Cook County away from the PTAB and place them under the sole authority of the Circuit Court

  • Extend the assessment appeals timeline from 30 days to 90 days

 

Tax Increment Financing Districts

 

The task force’s TIF District Subcommittee made three main recommendations for reforms to TIF district laws:

 

1.

 

Shorten the timeframe for TIF districts from 23 years to 10-15 years

2.

 

Tighten the definition of “blighted” to incorporate objective standards

3.

 

Increase transparency around the TIF district’s impact on the property tax collection process in other taxing bodies.

 

The full report of the Illinois Property Tax Task Force can be read at this link. Recommendations will be drafted into legislation for the General Assembly to consider this year.

 

Property tax reform is expected to be a significant topic in this legislative session, and Gov. J.B. Pritzker has made it a high priority for his administration. "The governor appreciates the work of the property (tax) relief taskforce and looks forward to continuing productive conversations around property tax relief this session," a spokeswoman said in an email.