McConchie says high property taxes are heavy drag on state's ecomomy
A recent report reveals that home sales in Chicago and its suburbs declined 7.3 percent in July compared with July 2015.
There were 11,716 sales this year, compared with 12,645 last year. State Sen. Dan McConchie, R-Lake Zurich, said that while there are many reasons why home sales have plummeted, he believes high property taxes are one of the primary reasons.
“The number-one issue that people are talking about is out-of-control property taxes,” McConchie told the Lake County Gazette. “It’s those property taxes that have so many people leaving the state. Here is the problem: Our property tax system is the most regressive form of taxation that there is.”
McConchie said the state’s dependence on property taxes is detrimental to its tax base, becoming a cycle of dependency.
“Governmental bodies that levy the tax, they are always going to get the same amount of money, even with fewer and fewer people, fewer and fewer homeowners, and fewer and fewer businesses in their area – which is what is causing this escalation in property taxes,” McConchie said. “It ends up being a problem that feeds on itself.”
McConchie said there is a ripple effect in how one sector influences the other. There is a void that needs to be filled, and it’s the remaining tax bases that have to carry that burden. It’s a cycle that needs to be broken, McConchie said.
“So if you have a big company leaving an area, everybody’s property taxes go up,” McConchie said. “When their property taxes go up, more people leave. Then the property taxes go up higher and more businesses leave. It just keeps getting worse and worse. There is no way to reverse that unless we fundamentally move away from property taxes as our primary form of taxation.”
McConchie said the only way to end the cycle is to implement an entirely different form of taxation.
“The fundamental thing we have to do is move away from property taxes to some other form of taxation that is not nearly as punishing to people,” McConchie said. “Property taxes, you’re going to pay that amount regardless of how much money you make, regardless of whether you are employed or not. So property taxes are enormously hard on the middle and lower middle class, on those people on fixed incomes, and on small businesses, especially start-up businesses that don’t have a lot of capital.”
McConchie also said property taxes affect people and businesses differently, depending on income.
“You can have people who are making millions of dollars a year who are paying almost nothing in property taxes, relatively speaking. Because of this reliance, (we have) a tax tied to property instead of a tax tied to either income or consumption,” McConchie said. “I think that we just fundamentally need to move away from property taxes as a primary form of taxation.”
Moving away from its dependency on property taxes may help Illinois stop the steady flow of departing residents and businesses. The state’s business environment has been unfriendly, continuously ranked near the bottom in nationwide polls. McConchie said he hopes to make the state a friendlier one for businesses.
“In order to address the fiscal issues that we have, we need to have a better business climate,” McConchie said. “The businesspeople are saying that they recognize that I am the best candidate to help provide for a business-friendly environment here in our state.”
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Lake Zurich, IL 60047, United States
Lake Zurich, IL 60047