Twice a year, taxpayers are hit with property tax bills.
The NBC 5 Responds team has highlighted many flaws in the system in our area. But, instead of only looking at problems, NBC 5 Chicago also wanted to examine potential solutions. What changes could be made?
Illinois homeowners are paying, on average, 24% more for property taxes than in 2019, according to data from Cotality. That squeeze was highlighted last year for families on Chicago’s South and West sides.
As values dropped for commercial properties in the Loop, the tax burden shifted to homeowners.
“Illinois is … compared to all states in the country, I think we’re the second from the most reliant on property taxes,” said David Merriman, a professor of public policy, management, and analytics at the University of Illinois Chicago.
Merriman is heavily involved in property tax reform. If he could wave a magic wand, here’s what his fix would be: “Where I would say I would like to put our priorities on is less reliance on the property taxes. Find other systems to fund the schools.”
He points to examples in other states, starting with Michigan.
More than 30 years ago, cries for property tax relief led Michigan voters to approve an overhaul of the system. It changed how Michigan schools were funded by relying less on the local property tax. Instead, the sales tax went up, and a new state education tax was created.
Over in the seven counties that make up the Minneapolis-St. Paul metro area in Minnesota, the nation’s first experience with tax-base sharing was established, according to the Lincoln Institute of Land Policy, a nonpartisan thinktank that studies taxation. Since 1971, a portion of the property tax revenue has been shared throughout the Minneapolis area to make resource distribution more equitable.
“That idea has been brought up for many years in this region, but we seem to be much more insular here, and we’re less willing to think about the community as a whole,” Merriman said.
Finally, in Florida, Governor Ron DeSantis has called for property taxes to be eliminated.
“Our citizens have been squeezed by escalating property tax assessments and millage increases at the local level,” he said in January.
Three different proposals are on the table in Florida, but opponents are concerned city budgets would be slashed and city services would be cut.
Realtor.com found 13 states have proposals to eliminate property taxes, though some are more serious efforts than others.
“They talk about getting rid of property taxes for residential homeowners. Nobody else. Which means businesses would still pay taxes and which also means renters, I presume, would still have their property would be taxed, as well. That seems, to me, grossly unfair,” Merriman said.
States have weighed the pros and cons of all these structures over the years. The biggest question: If they rely less on property taxes, what do they replace them with to make sure schools, and services like police and fire are still funded?
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