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Not surprisingly, local governments hate permanent property tax freeze idea

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* Finke

Members of the Illinois Municipal League said Tuesday they are opposed to Gov. Bruce Rauner’s idea to impose a permanent property tax freeze in Illinois. […]

Belleville Mayor Mark Eckert, a vice president of the IML, said the “vast majority” of the property taxes collected in his city go to municipal pensions.

“For us, it’s primarily police and fire pensions,” Eckert said. “We do meet our threshold each year of the actuaries. If they would freeze the property tax, I’m not sure how we would meet those criteria to properly fund those pensions.”

ILM executive director Brad Cole said that, on average, about 10 percent of a total property tax bill goes to municipalities. The bulk goes to local school districts. However, he said that for smaller communities that may not have a strong retail or manufacturing base, property taxes represent the bulk of the city’s income.

* The Illinois Policy Institute, however, thinks local governments and school districts should take even bigger hits, along with a property tax freeze

Reforms can end the state’s $1.4 billion pension subsidy to school districts and universities – subsidies that let those institutions dole out higher pay, end-of-career salary hikes and pensionable perks that dramatically drive up the cost of pensions.

Reforms can also reduce the state subsidies to local governments – excluding cities with populations below 5,000 – which prop up the nation’s most numerous units of local government and the bureaucracies that run them, saving $1.3 billion.

* Meanwhile, Greg Hinz

[IML Executive Director Brad Cole] says his group will not object if all of the proceeds from an income tax hike go to the state, with local governments not receiving their usual cut.

“As long as we’re not losing anything, that’s acceptable,” Cole says.

They didn’t get their usual piece of the 2011 tax, either, and the Senate’s plan as currently drafted does not give them a chunk of its proposed income tax hike.

posted by Rich Miller
Wednesday, Feb 22, 17 @ 10:08 am

Comments

  1. Funny that IPI, regular cut-ups they are. That $1.4 billion is actually $400-$500 million less than it was a few

    Comment by JS Mill Wednesday, Feb 22, 17 @ 10:13 am

  2. It’s completely reasonable for local governments/schools/misc taxing bodies to have access to our pocketbooks, without our approval, to raise property taxes. /s

    Seriously. These folks, coming out against this, are part of the problem of Illinoisans being ridiculously taxed on property.

    What is so unreasonable about increases only through voter referendum?

    Comment by cdog Wednesday, Feb 22, 17 @ 10:22 am

  3. The IML, huh? It’s not my fault that many of the municipalities have negotiated police and fire contractual salaries that they can’t afford, and therefore, result in massive pension outlays. The municipalities of the state are already creating a huge burden upon their residents and visitors, by continuing to inflate local sales taxes. If police and fire pensions are a problem, REASONABLY negotiate with these unions, remembering that the taxpayer isn’t your personal bank to fulfill the obligations of your “good ‘ol boy” contract deals. Just as the General Assembly, and specifically the Senate, is proposing, these municipalities and the IML can think to look ONLY to higher taxes as a solution. STOP SPENDING MONEY YOU DON’T HAVE, and perhaps, you won’t have to enact more taxes that will do nothing but drive-out more business, industry, and hard-working Illinoisans.

    Comment by TaxPoor Wednesday, Feb 22, 17 @ 10:22 am

  4. TaxPoor - “If police and fire pensions are a problem, REASONABLY negotiate with these unions…”

    Um, have you ever been in the Capitol?

    Comment by Dance Band on the Titanic Wednesday, Feb 22, 17 @ 10:26 am

  5. Try using more caps next time TaxPoor.

    Comment by Precinct Captain Wednesday, Feb 22, 17 @ 10:28 am

  6. Dance Band on the Titanic, I understand your question and agree. However, the police and fire pension mess is completely in the laps of the local municipalities. Perhaps Brad Cole should think about a “Negotiating in the Realm of Reality” seminar for his constituents, instead of whining for more revenue.

    Comment by TaxPoor Wednesday, Feb 22, 17 @ 10:29 am

  7. Why hamstring local governments ability to vote locally for tax increase? The state cannot get its fiscal house in order. The fiscal governments need to act using their fiscal power instead of looking for ways to be more fiscally irresponsible or imposing their fiscal irresponsibility onto everyone else by starving everyone to death .

    Comment by lost in the weeds Wednesday, Feb 22, 17 @ 10:32 am

  8. lost in the weeds, the municipalities are legally subject to regulation from the state. These municipalities have proven, time and time again, that they cannot be trusted to be prudent. Their absence of responsibility, and their tax-hungry strategies, are a major components in ruining the economy of the state. I don’t know about you, but I pay PLENTY (there’s a cap word for you, Precinct Captain) of property, sales, and income taxes, as well as fees. Again, the problem is not a lack of revenue, it’s a lack of guts on the part of state and local officials to say “no”, sometimes.

    Comment by TaxPoor Wednesday, Feb 22, 17 @ 10:39 am

  9. @cdog- the communities elect local boards and governmental officials to represent them. That is their say in how local government runs. So, in answer to your question, citizens already have a voice. State level action that impacts local funding but not state funding is the opposite of local control.

    Comment by JS Mill Wednesday, Feb 22, 17 @ 10:41 am

  10. ==the problem is not a lack of revenue==

    Revenue most certainly is part of the problem right now. Without revenue along with cuts these problems don’t get solved.

    ==These municipalities have proven, time and time again, that they cannot be trusted to be prudent. ==

    Then the local voters should hold those municipalities accountable.

    Comment by Demoralized Wednesday, Feb 22, 17 @ 10:45 am

  11. The scary part of this which TaxPoor and cdog are alluding to is the fact the municipalities are expecting to HAVE to keep raising taxes to keep up with the pension funding. This is bad! We can expect that our property taxes will keep going up due to unsustainable financial agreements local governments made.

    Comment by Maximus Wednesday, Feb 22, 17 @ 10:45 am

  12. Seems to me Illinois is a state full of whiners. Federal employees get a much better pension than IL Employees, and the nation has far more debt than Illinois, yet locals are manipulated by groups like the IL Policy Institute to scare them into supporting their Libertarian agenda which is good for only the already most powerful.

    Go Figure.

    Comment by Unon Man Wednesday, Feb 22, 17 @ 10:46 am

  13. ==the communities elect local boards and governmental officials to represent them.==

    My town’s police pension board consists of a president elected by retired police officers, a VP and Secretary elected by active police officers, and two other positions appointed by the village. I would hardly call that an elected board.

    Comment by City Zen Wednesday, Feb 22, 17 @ 10:52 am

  14. === It’s not my fault that many of the municipalities have negotiated police and fire contractual salaries that they can’t afford, and therefore, result in massive pension outlays. ===

    Actually, it is.

    Comment by Free Set of Steak Knives Wednesday, Feb 22, 17 @ 10:54 am

  15. Unon Man -
    When Illinois no longer has the highest or second highest property tax burden in the country then let’s talk. Until Illinois gets it’s fiscal house in order the people will be questioning why they have to pay so much in property taxes. We aren’t going to just write a check for thousands of dollars every 6 months and assume all is good.

    Comment by Maximus Wednesday, Feb 22, 17 @ 10:56 am

  16. Here’s the problem I want cities to address. TIF’s and enterprise zones that siphon off millions and millions before it ever gets to municipal coffers! This is a HUGE factor in causing the revenue crisis! Go look for yourself on your city website, how many TIF’s your city has. That money didn’t go to pay for services, police fire. That money went to developers and consultants. Your tax money is being siphoned for “economic development”. Yeah right. It went to developers, consultants and law firms who represent them. Then they have to raise taxes on all of us.

    Seize the means of wealth production folks

    TIFs and Enterprise Zones

    No public money for private profit.

    Comment by Honeybear Wednesday, Feb 22, 17 @ 10:59 am

  17. @City Zen- half of the pension. Oats is controlled by elected officials. Officials elected by your community. And, elected officials determined the make up of the Board.

    I’ll grant that you may not like it, but your community has had a say and directly controls those decisions by their votes.

    Comment by JS Mill Wednesday, Feb 22, 17 @ 11:06 am

  18. Cutting rates is also irresponsible as is raising rates. Voters are too lazy to insist on efficiency in spending and these Libertarian groups just want to cut and forget about responsibilities. Our quarrel really is with the voter, each other…

    Comment by Unon Man Wednesday, Feb 22, 17 @ 11:10 am

  19. “Half of the pension board”, sorry about that.

    Comment by JS Mill Wednesday, Feb 22, 17 @ 11:28 am

  20. @JS Mill

    That notion, and current situation is TOO INDIRECT.

    Though there is some level of accountability through voting the folks out of office, the damage is done by that time.

    If the media is weak at covering one of the 7000 taxing bodies, it’s hard to even track what they are up to. A person has to find a way to audit tax rates over years. I find that complete bs.

    Besides, to be truly Utilitarian, in reference to your namesake, there would be much greater happiness to allow great numbers of taxpayers to control their tax levels. :)

    Comment by cdog Wednesday, Feb 22, 17 @ 11:30 am

  21. Union Man, cutting spending is the most reasonable strategy in resolving the budget crisis. Chaotic, insane spending got us here. Significant reductions in spending is the first path to take in getting us out of here.

    Comment by Dennis Presley Wednesday, Feb 22, 17 @ 11:35 am

  22. Look, if you want local control of your police, firefighters, municipality, schools, etc- then you have to pay for it locally with either local income, sales or property taxes. Otherwise, we can have all services provided at the state level- which will drive state taxes up. Furthermore you won’t have local control.

    Comment by Thoughts Matter Wednesday, Feb 22, 17 @ 11:42 am

  23. Thoughts Matter, I’m not against local control and local taxation, but unreasonable local taxation is creating a detrimental economic environment for the entire state. The state has the authority and obligation to say, “enough is enough”……

    Comment by TaxPoor Wednesday, Feb 22, 17 @ 11:50 am

  24. IML should be pushing for the Senate compromise. It has a temporary property tax freeze (with some loopholes for locals to cover pension costs) and the sales tax provision (on food and medicine) should give local government more revenue.

    Comment by Telly Wednesday, Feb 22, 17 @ 11:53 am

  25. ==Honey=== TIF’s…

    TIF’s simply freeze the property tax level at the rate of the undeveloped property for 23 years. The increment or increased value as the property goes up due to the development is used to pay for improvements to the property Additionally communities that establish TIF’s offer taxing bodies the opportunity to seek impact fees for schools, villages and Fire Protection Districts. Without the TIF the development would not have happened - so there is no lost revenue .

    Comment by Texas Red Wednesday, Feb 22, 17 @ 12:31 pm

  26. Maybe Mayor Eckart can quit doling out TIF goodies to orchards, restraunts and now German microbreweries if things are so tight.

    Kinda ironic too. Bellevillw has some of the highest sales tax in the state. Never enough money for the likes of Eckart,Rauner,Madigan,Edgar,…

    What do they all have in vommon?

    Comment by Blue dog dem Wednesday, Feb 22, 17 @ 12:32 pm

  27. This teaches me a lesson about appeasement. I’ve been prepared to accept a permanent property tax freeze to appease Rauner, give him a win and get a budget deal. If it’s bad policy it should be scrapped. If it will do widespread harm to local governments then we shouldn’t consider it.

    We need to raise adequate revenue to pay pensions. We need to pass a budget so we can pay our bills.

    Comment by Grandson of Man Wednesday, Feb 22, 17 @ 12:35 pm

  28. I think we’ve established here that any IPI pension plan or cost estimate is highly suspect and should be treated accordingly.

    Comment by Arthur Andersen Wednesday, Feb 22, 17 @ 12:42 pm

  29. Just a plea to remember that municipalities are not the only entities that would be affected by a property tax freeze, and that municipalities have access to additional revenue streams unavailable to entities like park districts, library districts, and such. These are absolutely dependent on property taxes. To ask them, as some have, to engage in annual or even bi-annual tax rate referenda would create serious difficulties in preparing reliable operational budgets.

    Comment by Flapdoodle Wednesday, Feb 22, 17 @ 12:51 pm

  30. @cdog- with respect- it is up to the citizens to get involved and vote. Many like to complain, but few like to get involved (and own) in a solution.

    Comment by JS Mill Wednesday, Feb 22, 17 @ 1:01 pm

  31. @JSMill. We agree, mostly.

    Our difference is where to apply the voter control. You say at the election of the official . I say those elected officials should present any increase in their budget to the taxpayer.

    Freeze Property Taxes. Stop letting the fox run the hen house.

    Comment by cdog Wednesday, Feb 22, 17 @ 1:20 pm

  32. ===- TaxPoor - Wednesday, Feb 22, 17 @ 10:22 am The IML, huh? It’s not my fault that many of the municipalities have negotiated police and fire contractual salaries that they can’t afford, and therefore, result in massive pension outlays. The municipalities of the state are already creating a huge burden upon their residents and visitors, by continuing to inflate local sales taxes. If police and fire pensions are a problem, REASONABLY negotiate with these unions, remembering that the taxpayer isn’t your personal bank to fulfill the obligations of your “good ‘ol boy” contract deals. ===

    Denny Jacobs once answered me the same way years ago. Neither of you understand interest arbitration in Illinois. Ain’t no way, ain’t no how you can do that. It’s been tried. And if you try to hold wages to minimal increases in hard times, you are only costing yourself more because what happens is, the city cries poor to a paid arbitrator with a paid recorder and loses the arbitration anyway. Been there, done that.

    Comment by Shemp Wednesday, Feb 22, 17 @ 1:25 pm

  33. ===- TaxPoor - Wednesday, Feb 22, 17 @ 10:29 am:
    Dance Band on the Titanic, I understand your question and agree. However, the police and fire pension mess is completely in the laps of the local municipalities.====

    Wrong again.

    Who sets fire/police retirement age? State
    Who sets fire/police years of service? State
    Who sets the benefit level of fire/police pensions? State
    Who sets fire/police employee pension contribution rates? State
    Who sets the local pension fund board member makeup? State
    Who sets the funding rules? State
    Who sets the investment rules? State
    Who sets the disability/widower/dependent benefits? State
    Who funds the fire/police pensions? Cities

    Comment by Shemp Wednesday, Feb 22, 17 @ 1:30 pm

  34. ===- Honeybear - Wednesday, Feb 22, 17 @ 10:59 am:

    Here’s the problem I want cities to address. TIF’s and enterprise zones that siphon off millions and millions before it ever gets to municipal coffers! This is a HUGE factor in causing the revenue crisis! Go look for yourself on your city website, how many TIF’s your city has. That money didn’t go to pay for services, police fire. That money went to developers and consultants. Your tax money is being siphoned for “economic development”. Yeah right. It went to developers, consultants and law firms who represent them. Then they have to raise taxes on all of us.

    Seize the means of wealth production folks

    TIFs and Enterprise Zones

    No public money for private profit.===

    Do you actually know how either of those work, or are you just spewing regurgitated rants? Cities only have a few tools for economic development, with TIF and Ezone being the biggest. TIF must pass a “but-for” standard. But-for TIF, one of our largest, best paying manufacturers wouldn’t be here. The base property tax on a property still gets distributed, and in 23 years, all of the tax gets distributed. And TIF dollars can’t be spent on anything. It can’t build new buildings, but it can build roads, water/sewer extensions, demolition of blight, stormwater management infrastructure and such.

    Ezone abates 5 years of taxes on improvements, not exactly a what I would call siphoning away tax dollars. But hey, feel free to take away the 2 biggest tools we have here so we can continue to rot away compared to our neighbors. That’s cool.

    Comment by Shemp Wednesday, Feb 22, 17 @ 1:38 pm

  35. Shemp, who negotiates the police and fire contracts, and in many cases, “gives away the farm”? CITIES Also, with regard to you 1:25 p.m. contract, if the cities are powerless to negotiate a fair contract, and their simply at the mercy of the unions and arbitrators, you make a great argument for revisions of the state’s labor laws. Thanks, as this is something that I’ve been advocating for many years.

    Comment by TaxPoor Wednesday, Feb 22, 17 @ 1:39 pm

  36. Shemp, sorry—–1:25 p.m. comment, not contract.

    Comment by TaxPoor Wednesday, Feb 22, 17 @ 1:40 pm

  37. Pension Boards are the smallest problem. Yes, they are stacked toward the beneficiaries, but they don’t control employee contribution rates or retirement eligibility rules. They do have some say over investments, but most hire an advisor anyway. Their job is to oversee investments (which are regulated by the State) and make sure the City is contributing at least the minimum amount set by State law. Make statewide fire and police pension funds similar to IMRF and we’d all be better off.

    Comment by Shemp Wednesday, Feb 22, 17 @ 1:42 pm

  38. I am all for shifting costs away from the property tax, but most cities (non-home rule) don’t have the authority to institute an alternative. You can’t simply freeze the property tax and not provide for savings opportunities (reforms) or alternatives to raising revenues through other taxes.

    At some point, people just need to come out and say, “we need to fire police officers and firefighters to reduce staffing levels to get our expenses under control.” However, I find the line of people willing to actually do that to be pretty short.

    Comment by Shemp Wednesday, Feb 22, 17 @ 1:50 pm

  39. ShEmp. The same tired argument on TIF. Retail TIf for micRobrews. Really. Like that doesn’t take business from established saloons? TIF for growing pumpkins, like somebody wouldn’t go to the local store. Might I remind you of the East/West Gateway report on TIFs ? Or is EWGW full of hot air in your opinion?

    Comment by blue dog dem Wednesday, Feb 22, 17 @ 2:19 pm

  40. Shemp- you know darn well that “but for” is a TOTAL farce. Crony capitalism is what it is! It’s a cabal of developers, city officials, and legal firms lining their pockets, taking it before it gets into the account. I’m watching the process of “blighting” to take it over happen in my municipality. Campaign contributions for “assistance” setting it up. Also funny how you didn’t mention the largest corporate welfare aspects of ezones, the utilities tax exemption and the building materials exemption not to mention the machinery and equipment exemption

    Belleville weaseled out of 185,000 in taxes in 2014.
    The 2015 EZone report hasn’t been released ( total violation of law and makes me wonder what they are hiding)

    All this can be found on the DCEO website under Legislation and Reporting

    So no Shemp I don’t except your brand of economic development

    Crony capitalism. Plain and simple

    Comment by Honeybear Wednesday, Feb 22, 17 @ 2:23 pm

  41. Honeybear,

    Why do you show up on every single CapFax story pushing the same scripted anti-economic development talking points (regardless of what the actual topic of the story happens to be)? What do you think you’re accomplishing?

    It can’t be just a union thing. Because your brothers and sisters in the skilled trades have absolutely NO PROBLEM working with economic development folks. None. Most of the local ED people I know have labor on their board and/or get funding from labor groups. In fact, five minutes after my organization announces a project, I am guaranteed to get a call from my community’s locals wanting contact information for whatever company I’m working with. And I provide it.

    From reading your posts, its clear you don’t even understand the state programs you rail against (case in point: last week you confused EDGE with the River Edge Redevelopment Zone program).

    I would strongly encourage you to request a sit-down meeting with someone from your community’s local economic development office. Ask them about the work they do; the challenges of doing economic development with these supposedly-generous incentive tools you constantly denounce. Ask your local developer how he/she balances the task of assisting companies while simultaneously being a good steward of local tax dollars.

    I think you’ll find the conversation illuminating.

    Comment by sulla Wednesday, Feb 22, 17 @ 2:24 pm

  42. Sulla. First thank you for a very nice response. Excellent. Here’s the thing. Here’s why honeybear is on the warpath wirh so called “economic development”. First a few issues. You don’t know who I am or how familiar I am with state programs. I’m not trying to be like Trump but I’m a lot lot deeper into this than anyone knows. Believe me or not. I don’t care. 2) I know the difference between EDGE and River Edge and I did combine the two in a recent post. My bad. Both programs though give millions of tax incentives and rebates instead of going into our coffers to be distrusted by our state government. Brewpubs and marinas should get paid for last since they oy brought about a dozen low paid jobs.
    Anyway
    There are good TIF’s. There is sound economic development. There are worthwhile EDGE incentives. But I’ve got the inside track on a heck of a lot these “arrangements”. But why I’m against them is because the money they siphon off has gotten to be so much that it threatens programs services and,…….AFSCME sisters and brothers who work for the counties and municipalities. So I go after the crony capitalism, the corporate welfare instead of threatening seniors or cutting good jobs. The privileged are the problem. The developers who buy the politicians. The lawyers who craft the deals and protect the wealthy. Class warfare. You bet.

    Don’t underestimate me

    Comment by Honeybear Wednesday, Feb 22, 17 @ 3:01 pm

  43. So, uh, Honeybear, are there any incentives that you believe in that don’t cost or forego public dollars, or should we just put up welcome banners and hope people just show up because we are a high functioning State?

    Comment by Shemp Wednesday, Feb 22, 17 @ 3:08 pm

  44. Shemp- there are insentives that do work and are worth it. I know of many. But I also know of more that rob the state and our communities. My thought?

    Rural/underserved healthcare enterprise zones

    Especially in the rural counties healthcare is flatlining and it would produce a lot of good wage jobs.

    Comment by Honeybear Wednesday, Feb 22, 17 @ 3:17 pm

  45. A welcome banner might be nice.
    1) I’ll be damned if meals on wheels gets cut before EDGE
    2) how are you going to attract companies with national RTW?

    No it’s how you should be attracting all along by the qualities of our community not by corporate welfare.

    Comment by Honeybear Wednesday, Feb 22, 17 @ 3:22 pm

  46. ===Honeybear==

    ..”River Edge”

    Now there was a pretty interesting 1986 movies called “The River’s Edge”. We might all agree to watch that right ?

    Comment by Texas Red Wednesday, Feb 22, 17 @ 4:16 pm

  47. Oh I love movie night Texas Red!

    Comment by Honeybear Wednesday, Feb 22, 17 @ 4:42 pm

  48. Thanks Honeybear for clearing up the future of eco devo incentives with such comprehensiveness and clarity.

    Locally, out here in the sticks, we have multiple TIFs, and each was signed off by all the other taxing jurisdictions. It’s all we have to work with. The State hasn’t been bringing anything to the table lately. When your last conference has a session about “Economic Development Despite the State of Illinois,” it should illustrate why local incentives exist. But hey, paint with a broad brush. It’s cool. I know how you like being lumped in with every negative story about state workers.

    Comment by Shemp Wednesday, Feb 22, 17 @ 4:56 pm

  49. Shemp knows what’s up on these particular topics, but I can’t fully disagree with Honeybear. TIF’s can be abused, just like any other government spending.

    I’m a proud military man, but the Department of Defense has had its share of fraud. Public money, private money (Enron, etc.), it doesn’t matter: where there are piles of money, there is the potential for abuses. It doesn’t matter how desperate the needs are (didn’t Blago shake down a children’s hospital?), the temptation will be too much for some.

    Comment by Liandro Wednesday, Feb 22, 17 @ 5:15 pm

  50. Be snarky all you want Shemp. If there’s something I’ve learned with the election of Trump, the average citizen is sick and tired of seeing their hard earned tax money going to the wealthy and their corporations. They’re also tire of corrupt politician handing it to them. It’s a bridge issue that the right and the left have in common. Blue Dog Dem is resonated by it. If your neck of the woods is doing right by people with your TIF’s then cool. I’m currently organizing our retirees to start attending these municipal and county meeting. We’re going after it.
    Thanks Liandro, I know you’re trying. Hold on pal. The assault on the local bodies hasn’t even really started yet. It’s coming as soon as he’s run over us. What branch? I was a Navy Chaplain. I appreciate your service. But watch those developers and their TIF’s. Make sure it’s a good deal for the people. We have to restore faith, trust and accountability in our elected leaders.

    Oh and Shemp, people will always paint state workers with a broad brush. It’s about time scrutiny and accountability went towards so-called “economic development”. You’ve gotten away with it for too long.

    Comment by Honeybear Wednesday, Feb 22, 17 @ 6:16 pm

  51. Folks. I recommend google,’east west gateway report on TIFs’.

    Comment by Blue dog dem Wednesday, Feb 22, 17 @ 7:24 pm

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