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* Gov. Pritzker on CBS 2…
“We’re shortly going to be having conversations with leadership about rate structure, for the graduated income tax, to make sure we have a fair tax system. That’s the very first thing we’re going to go after over the next week or two, we’ll be having those conversations,” Pritzker said. “I’ve said all along that you need to negotiate the rates and the breakpoints for a new tax system in the state so that middle class taxpayers will pay less. So we can offer a real estate tax break for people all across the state. And that’s what I’m going to do.”
One place that really, truly needs property tax relief is the south suburbs. But I’m not sure if more state money is the sole answer there. Something needs to be done about the way property tax money is distributed in that county and the region needs some serious economic development assistance.
* From Crain’s, here’s the tax bill on houses sold for $330,000…
* Tax bill on houses sold for $270,000…
* Tax bill on houses sold for $115,000…
* One more…
In Wheaton, which is about as far west of downtown Chicago as Flossmoor is south, a house on Burning Trail that sold Feb. 12 for $510,000 has a property tax bill of $11,240, or less than half the Flossmoor home’s $23,420 bill. The same distance north of the Loop, in Highland Park, a house on St. Charles Place that sold for $500,000 on Feb. 20 has a property tax bill of about $13,200.
* Crain’s…
Tax rates in south Cook County municipalities are, on average, about twice those in western and northern towns. […]
A key reason for south Cook County’s higher property taxes is the loss of hundreds of thousands of manufacturing jobs in the Chicago and Northwest Indiana areas in the late 20th and early 21st centuries, which has shifted the tax burden onto homeowners. In the years after the housing bust, south Cook County was hit hard by foreclosures. At the height of the crisis, about 1 in 20 homes were in foreclosure in many south suburbs—Calumet City, Hazel Crest, Markham and Olympia Fields among them—compared with a countywide peak of about 1 in 33, according to the Institute for Housing Studies at DePaul University. The foreclosure crisis left homes empty or decrepit, further shifting the tax burden to the owners of viable homes.
And then the state made it worse by giving seniors a huge tax break that left the few remaining residents paying full freight.
posted by Rich Miller
Friday, Mar 1, 19 @ 12:44 pm
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I’m sure MJM would love to sponsor legislation for property tax reform. First on the agenda should be property tax caps for Cook.
Comment by Not It Friday, Mar 1, 19 @ 12:49 pm
It’d be interesting to see a companion graph of local sales tax receipts and commercial property tax numbers by city or region. I think part of the disparity is that the south suburbs lack a lot of retail and commercial property, putting more of a burden on home owners there.
Comment by 47th Ward Friday, Mar 1, 19 @ 12:54 pm
Property tax caps won’t cut it for those living in the south suburbs. They would only lock in the disparity. The lack of commercial/industrial concerns in these areas, for whatever reason, has caused the dilemma here and in other places.
Maybe it’s time to dust off the old proposal to pool all commercial/industrial property tax revenues (statewide or regionally) and send them back to the locals on a per capita basis. The wealthy areas will hate it but areas like the south suburbs might get some very needed relief.
Comment by Great Caesar's Ghost! Friday, Mar 1, 19 @ 1:05 pm
Question: do banks holding onto foreclosed homes pay regular property tax?
Comment by The Way I See It Friday, Mar 1, 19 @ 1:11 pm
I have lived in the South Suburbs for the better part of 60 years. There is no easy road back at this point. Taxes are too high and property values too low. My real estate tax bill is about $17,000 on a house I would be lucky to sell for $400K. The bulk of the tax bill is of course the schools. It doesn’t cost significantly less to educate a kid in the south suburbs than it does on the north shore or west suburbs. There is just far less value in the real estate to tax. If the State would level the playing field by picking up the bulk of eduction expenses that would make a huge difference.
Its very difficult to sell higher end homes in the South suburbs. The asking price has to be lowered to offset the tax bill. The reduced selling prices beget lower comps which makes getting mortgages more difficult.
White flight has also taken hold. There are great efforts being made by a couple of the Villages to market to the young folks. I don’t think we have gotten to the point of no return but it will take a lot of work by a lot of people.
Comment by What's in a name? Friday, Mar 1, 19 @ 1:13 pm
===And then the state made it worse by giving seniors a huge tax break that left the few remaining residents paying full freight.===
With that and the non-taxed retirement income, it’s pretty clear that there are a lot of folks in the state that are planning on running out on the check rather than helping pay for the services they enjoyed for the last several decades without completely paying for them.
Meanwhile, over 65 has the lowest rate for poverty in the state.
But, by all means, lets continue to help a cohort that’s doing better than all of the other cohorts instead of addressing individual issues.
Comment by Anon Friday, Mar 1, 19 @ 1:18 pm
=== It’d be interesting to see a companion graph of local sales tax receipts and commercial property tax numbers by city or region. I think part of the disparity is that the south suburbs lack a lot of retail and commercial property, putting more of a burden on home owners there. ===
Sales tax might reduce the property tax burden for the municipal and county portion only as they have the authority to levy and collect sales taxes, but those two line items are generally, especially in relation to the school districts, a small portion of the overall tax bill. School districts, library districts, park districts, fire protection districts, mosquito abatement districts, drainage districts, townships, etc. are not impacted at all by sales taxes.
Comment by Just Observing Friday, Mar 1, 19 @ 1:20 pm
For the few southern suburbs like Chicago Heights that do have a decent amount of retail and industry, the tax rates are still relatively high like their neighbors in Flossmoor and Matteson. So it can’t all be explained by lack of a non-residential base.
Comment by Six Degrees of Separation Friday, Mar 1, 19 @ 1:21 pm
=== Question: do banks holding onto foreclosed homes pay regular property tax? ===
By and large yes, but they may (not sure) be entitled to a vacancy reduction if the property is vacant or uninhabitable.
Comment by Just Observing Friday, Mar 1, 19 @ 1:22 pm
– First on the agenda should be property tax caps for Cook. –
History and Scope of Tax Caps
In 1991, the Illinois General Assembly passed the Property Tax Extension Limitation Act (Public Act 87-17) commonly known as “tax caps.” It affected taxing districts in the “collar counties” (i.e., DuPage, Kane, Lake, McHenry, and Will). Tax caps were extended to Cook County in 1995, and the following year all Illinois county boards were given the option of placing a referendum on the ballot asking county voters whether tax caps should apply to taxing bodies in their county.
Political context:
Republicans won control of the Illinois House in the 1994 elections in large part by promising to bring tax caps to Cook County.
Comment by Michelle Flaherty Friday, Mar 1, 19 @ 1:28 pm
===but they may (not sure) be entitled to a vacancy reduction if the property is vacant or uninhabitable. ===
You didn’t just go there, did you? We might need a whole new thread on the uninhabitable part.
Comment by Been There Friday, Mar 1, 19 @ 1:29 pm
“lets continue to help a cohort that’s doing better than all of the other cohorts instead of addressing individual issues”
I believe that’s “Let’s continue to help a cohort that votes at nearly twice the rate of everyone else”.
It’s smart politics, but terrible policy.
Comment by Chris Friday, Mar 1, 19 @ 1:29 pm
A graduated income tax and property tax relief are not panaceas, but they need to be done to bring in more state revenue, give relief and right-size the tax burden.
One of the inherent problems of politics, in my opinion, is that many voters want politicians to be super-people. Then politicians pander for votes and overpromise stuff that they can’t deliver. Voters get disenchanted and frustrated, and the cycle continues.
As far as manufacturing, if we’re bold and seize the moment, we should have wealth surcharges and use the revenue to make state-owned factories that make a variety of products. In that way we can bring jobs. We can bring stability and predictability that people are looking for by having, say, five-year systems, where we make a certain amounts of goods each year. If there are three workers per position, well, at least they’re working and not idle to think bad thoughts about gahvernment (“Soviet” accent).
Just kidding.
Comment by Grandson of Man Friday, Mar 1, 19 @ 1:34 pm
High South suburban property taxes decrease fair market values leading to lower tax assessments and higher tax rates.
One way to lower taxes is to reduce spending. Consolidating the many school districts and municipalities would reduce the duplication of functions and tax levies area-wide.
So, persuade the local elected officials and school districts to co-operate, share power and reduce patronage positions.
Comment by James Friday, Mar 1, 19 @ 1:34 pm
Has there been consideration among residents that Matteson, Olympia Fields and Flossmoor should merge?
The combined population of the three would be about 33,000.
Comment by wordslinger Friday, Mar 1, 19 @ 1:47 pm
These suburbs should look at either merging or becoming unincorporated.
Comment by Chicagonk Friday, Mar 1, 19 @ 1:48 pm
I have lived in Flossmoor for about ten years. I grew up next door in Glenwood, where my mother still lives. The residents of the South Suburbs are being screwed, and it’s time to call the reason out for what it is, racism. The industry and jobs fled along with most of the white people from Harvey and Riverdale, South Holland and Lansing, Glenwood and Chicago Heights. I love the diversity of my community, but am so sick and tired of the reality that the homeowners of my region are losing long term wealth compared to residents of every other region of Chicagoland.
I hear the folks in Lake and McHenry county rail against their property tax rates but look at the data above. Flossmoor is almost twice as high as Highland Park. And while the HF school district is still performing well, overall the children of the South Suburbs, overwhelmingly children of color, have been relegated to poorly performing schools and disadvantaged compared to children from throughout Chicagoland. The same children ours will have to compete with for college admissions and future employment. Not too mention that the Catholic Church has shut down almost every Catholic grade school in the area. They closed the one my family attended about five years ago.
Until our statewide leaders decide to end the institutional racism that has significantly contributed to the current condition of the South Suburbs, our children will be at a permanent disadvantage.
Comment by Mike Noonan Friday, Mar 1, 19 @ 1:51 pm
The Village’s themselves aren’t the problem as much as the schools. The School Districts already cover multiple municipalities. I don’t think the per student spending is altogether that much different that more affluent Districts.
Comment by What's in a name? Friday, Mar 1, 19 @ 1:54 pm
Pretty jaw dropping disparity. Have the individual South Surburbs raised their property taxes over the years to increase revenue? I’m Admittedly not well versed on this issue, but I thought locals could raise their own property taxes through referendum. Is that part of the issue here?
Comment by Centennial Friday, Mar 1, 19 @ 1:56 pm
I’ll just note that providing BOTH a break to over half the citizens currently paying income tax AND providing property tax relief from a new graduated income tax sound like an impossible lift.
Comment by RNUG Friday, Mar 1, 19 @ 2:01 pm
A more natural merge would be Flossmoor & Homewood
they already have mutual interests High School ,park dist, mutual aid fire etc. Then Matt, OF & Richton Park couild merge. But this is nickel dime without relief for school tax.
Comment by Anonymous Friday, Mar 1, 19 @ 2:04 pm
With this topic as “exhibit A”, the question should not be “Why are so many people leaving?”, it should be, “Why are so many people staying?”
And why would anyone sign on for a 30-year mortgage to pay $330,000 for a house in Mattson when they are faced with a property tax bill that almost equals their monthly mortgage payments? Likely three grand a month (total) without utilities, upkeep or repair. In an area where home appreciation likely isn’t going to be outstanding, and household income is what, $80K? Boggles the mind.
Comment by Stuntman Bob's Brother Friday, Mar 1, 19 @ 2:25 pm
It sounds like these south Cook suburbs are in a vicious cycle. They do not have the tax base to fund services without a high tax rate, and the higher the tax rate, the more their tax base declines. Some sort of bailout or increase school funding payment may be the best way to help these areas claw their way out of this vicious cycle.
Comment by Three Dimensional Checkers Friday, Mar 1, 19 @ 2:29 pm
I don’t doubt the disparity in the tax bills, but I do find that the figures for the towns located in DuPage County to be off. I sold a house in Glendale Heights a year ago which had a tax bill of over 10k, and it was a regular cookie cutter house like the rest of the neighborhood. Granted 70 percent of that bill went to the school districts the figures just look too low.
Comment by Cable Line Beer Gardener Friday, Mar 1, 19 @ 2:34 pm
Yeah, Homewood and Flossmoor might share a bunch of services already, but they’d never merge. It’d be like trying to combine Logan Square and Hyde Park.
Homewood people don’t want to be Flossmoor people, and vice versa. We’re okay with pickup trucks in the driveway.
Comment by ChrisB Friday, Mar 1, 19 @ 2:56 pm
I agree with RNUG as usual.
Comment by El Conquistador Friday, Mar 1, 19 @ 2:57 pm
Map those taxes against per student spending:
Matteson 14,700
Naperville 15,300
Palatine 18,700
Comment by WH Mess Friday, Mar 1, 19 @ 3:20 pm
You’re absolutely right to be flagging this, Rich. It’s a tragic situation there. Tens of thousands of working class families have lost their home equity — often all they have.
Comment by Driveby Friday, Mar 1, 19 @ 3:29 pm
What are the numbers of public school pupils per home? Naperville benefits from having many senior citizens and large numbers of private school students.
My block has 15 homes, 2 public school students and 5 private school students. We are a net contributor to the school district.
Comment by Last Bull Moose Friday, Mar 1, 19 @ 3:34 pm
This to me highlights the real issue much better than the Trib’s Tax Divide series. This explains the primary driver better- high local tax rates in these areas.
Rich’s article that he posted a couple of weeks ago regarding MN’s approach to spreading out some of the tax levies across a metro area to equalize this problem seems particularly relevant. Either way some type of regional approach seems to make sense.
Comment by Boone's Is Back Friday, Mar 1, 19 @ 3:45 pm
The reform in Illinois taxing needs to occur with a comprehensive look at income tax and property tax and how schools are funded. We should have an honest discussion about how much every unit of government we have adds to the local tax bills and begin to also tackle reducing/consolidating taxing bodies. It would be a heavy haul.
Comment by illinifan Friday, Mar 1, 19 @ 3:55 pm
You can choose different views and you can zoom in on areas. Some of the views may help explain some differences.
https://opportunityatlas.org/
Comment by logic not emotion Monday, Mar 4, 19 @ 9:38 am