Illinois' high property taxes drive down home values
Illinois' high taxes hurt struggling taxpayers who shoulder that burden and drive down home values across the state, a recent report issued by a Chicago-based think tank indicates.
"In fact, Illinois is one of only seven states where this is the case, and one reason home values are struggling to increase is because of high property taxes," Illinois Policy Institute analyst Mindy Ruckman said in her report.
As property taxes increase, the cost of homeownership also increases, leaving taxpayers with less money to pay off the mortgages on homes -- which don’t strongly appreciate in value, Ruckman said.
"Sometimes high property taxes cause home values to go down because homebuyers do not want to pay a high price on a mortgage if the property taxes are also high," Ruckman said. "Illinois is taxing the value out of its homes."
With Illinoisans paying the highest property taxes in the nation, double the national average, Ruckman said in her report that prospective home buyers shy away from the state because they don't want to become one of those over-burdened taxpayers.
"Because of this, many Illinois homeowners are struggling to sell their homes and are stuck paying a high property tax bill in the meantime," Ruckman said.
Homeowners in Illinois also cite the same high tax burden as a reason why they want to leave the state.
"This is no surprise considering that, in addition to having the highest property taxes in the nation, property taxes in Illinois are also growing 3.3 times faster than median household incomes," Ruckman said.
All of that is reason enough why Illinois residents need protection from tax increases, in addition to immediate and long-term tax relief that legislators should implement via a property-tax freeze, Ruckman said. The same legislators also should implement a property-tax cap to limit how much homeowners' property taxes can be raised, Ruckman said.
"A property-tax cap can prevent property taxes from increasing on individual homes or across an area," Ruckman said. "Also, if a unit of government wants to collect more money than the cap allows, then the government must first receive permission from voters via a referendum."
Ruckman also called on legislators to implement a taxpayer bill of rights that would restrict state government from introducing new taxes or raising existing tax rates.
"A taxpayer bill of rights, similar to Colorado’s constitutional amendment, would put a limit on how much revenue a government can collect each year by restricting revenue growth to a rate of population plus inflation," Ruckman said. "Similar to a property-tax cap, with a taxpayer bill of rights, a government also must seek voter approval if it would like to raise taxes above the limit or create a new tax. However, a taxpayer bill of rights applies to all taxes, not just property taxes."
The Illinois Policy Institute is an independent organization that generates public policy solutions aimed at promoting personal freedom and prosperity in Illinois. Ruckman previously was a research assistant with the Illinois Legislative Research Unit, where she conducted research for the General Assembly on a broad range of issues, according to her institute bio. Ruckman also has participated in campaigns and worked in her state representative’s district office. She is a graduate from the University of Illinois Springfield, earning a bachelor's degree in political science, with a concentration in international relations.