8 Comments - Anonymous - Thursday, Mar 15, 07 @ 7:45 am: This is such a complicated issue that ramming something through quickly will be a disaster. - Cassandra - Thursday, Mar 15, 07 @ 8:10 am: The fact is that the state government has enough money to give at least a modest level of property tax relief to all communities in the state. Let’s start with the Illinois Department of Revenue. If the GRT is passed, the Dept will need far fewer employees. One of the primary advantages of a GRT is that it is much easier to collect and enforce than the corporate income tax. So, a GRT implementation should be accompanied by a substantial reduction in the cost to taxpayers of running the Illinois Department of Revenue. Fewer middle managers. Fewer revenue agents. Lots fewer. There are hundreds of similar examples of ways in which state government can be made more efficient and less costly and such changes can save a lot of money in both the short and long run. Of course, that means lots fewer patronage jobs. And that’s the rub. But a GRT combined with substantial cuts in unnecessary state government personnel and expeditures could help bring property tax relief for all. The government doesn’t just exist to help the the so-called poor, plus greedy politicians and our lavishly compensated state government employees. It should work for all of us. - Collin Hitt - Thursday, Mar 15, 07 @ 10:47 am: First of all, relieving property taxes while passing the largest tax hike in history is tantamount to bandaging a man’s thumb while amputating his arm. That said, the only means through which the state can relieve property taxes is by setting up an abatement fund. It can’t actually slash local rates. Instead the state will pay municipalities to lower taxpayers’ property tax bills. The effect of doing so will almost certainly swell the size of local governments. And, if the Commercial Club of Chicago is to be trusted, many Illinoisans will – as a result – see their property tax bills go up. But that’s beside the point as well. Does anyone actually think there will be a penny left in that abatement fund in ten years time? That money is going to be sitting there for the taking, waiting to be spent, year after year, like a proverbial twenty dollar bill on the state’s bedside dresser. - cermak_rd - Thursday, Mar 15, 07 @ 11:32 am: Why not have a backwards referendum? Have it states as something like “the state of IL is now providing x$ more to your school district than it used to. Do you want to reduce your property tax by y%”. Require that every school district that gets more $ from the state has to offer this referendum and live by its consequences. That way the state really doesn’t have to deal with the issue of property taxes (which are local and shouldn’t be the concern of the state anyway). - Truthful James - Thursday, Mar 15, 07 @ 3:07 pm: As Hoosier Dady will tell you, in Indiana the State provides up to 20% (lower if there are bonds being paid from the Property Tax.) as a Property tax Rwplacement Credit. There is a Homestead exemption which the State covers. But then, Indiana requires all taxing bodies to get the property tax levy for each fund approved by the State. It strictly limits the increase in taxes each year. And then this year they implement a Circuit breaker in two stages. The first stage for moneys collected in 2008 and 2009, sets the maximum real and personal tax which can be collected on any residence at 2% of the Market Value. (In Indiana the Assessed Value is 100% of market Value.) Most properties in Indiana are below that. The larger urban properties will see tax reductions, which are not allowed to be made upo by the taxing body from any source. In 2010 and thereafter all property comes under the 2% level. With commercial and industrial property controlled like that, one County estimates the net loss to municipal, school and other public services in the County to be in excess of $70 Million. This will lead to significant cuts. There is weeping and gnashing of teeth. - Truthful James - Thursday, Mar 15, 07 @ 3:07 pm: It is not going to be a pretty sight. - Just the Facts - Thursday, Mar 15, 07 @ 3:17 pm: As usual Cassandra’s assertions have no factual basis. A GRT would not reduce necessary headcount at the Department of Revenue. First,the Governor has not committed to an immediate abolition of the corporate income tax. There are only vague promises to phase it out at some point. There would just be a new tax, the grt added on top of the corporate income tax. So another level of complexity would be added. Moreover, even if the corporate income tax were to be repealed on the effective date of the grt, all corporate income tax issues would not disappear. The IDOR would continue to audit for years up thru the repeal, audits would be contested,etc. Perhaps about 10 years after repeal it would begin to fade away. Next, anyone who thinks that a grt would be less complicated to administer is mistaken. It will be different and will have different issues and will also lack the 38 year history of issues being contested and resolved that exists under the corporate income tax. Everything will be new and fresh and subject to interpretation. Plus unlike the current tax,there will be no federal tax to go to as a starting point for determining state level concepts and as a starting point for determining state taxation. Now federal taxable income is the starting point. Under grt you would have some state gross receipts number without a federal counterpart. Hence, more opportunity for under-reporting. Just as the legislative process will be a boon for contract lobbyists, the implementation of a grt would be a boon for tax lawyers and accountants. I would take odds that the department of revenue will need more not less employees. - Cassandra - Friday, Mar 16, 07 @ 8:36 am: Since a major selling point for the GRT is ease of collection, taxpayers should insist on a reduction in the expense of collection, that is, a reduction in the budget of the state bureaucracy established to collect taxes. I am sure make work could be found. But the focus should be on simultaneously increasing revenues and reducing the cost of government. Sorry, comments for this post are now closed.