Study refutes Democrat's claim that soft education funding has raised property taxes
The phrase “unfunded pension liabilities” sounds like one of those political euphemisms meant to obscure why property taxes have risen so dramatically over the past 20 years.
But if you render it in concrete terms, it would sound more like “I can’t afford to pay my property tax bill because it has almost doubled since 1996.”
That finding is pointed out in a study, “Why your property tax bill is so high, and how to fix it,” published Aug. 2 on the Illinois Policy Institute (IPI) website. IPI writer and Director of Content Strategy Austin Berg said that the dramatic increase has “rocketed Illinois to the top of the table” compared with property taxes in other states.
The figures contradict claims by Democratic gubernatorial candidate J.B. Priztker that underfunding schools has driven up property taxes, according to the report.
The study cites one Lake County homeowner who owes a whopping $8,000 in annual taxes on a house with an estimated value of $180,000. Over the past two decades, politicians have wrung additional dollars from property tax assessments to cover retirement benefits for state workers, Berg states.
A breakdown of that homeowner’s assessment illustrates what has gone wrong, according to IPI.
“Among other things, it’s paying for the retirements of nearly 100 municipal retirees in Lake County who already have become millionaires via the Illinois Municipal Retirement Fund,” Berg said. “Their average retirement age was 57 years old, they contributed an average of $74,500 to the pension system over the course of their careers, and receive an average pension check of more than $95,000 each year.”
Despite the jump in property tax bills, home prices in Illinois are not keeping pace with their tax assessments. In fact, the report cites statistics from the Federal Reserve Bank of St. Louis ranking the growth of Illinois home prices as 49 percent below the national average.
Pritzker is among a growing group of politicians of both parties claiming low state funding for elementary and high schools (only one-quarter of their funding is from the state, The Chicago Tribune reports) is forcing local communities to hike property taxes, Berg said.
However, the study claims the pension system is actually at fault. In the two decades between 1996 and 2016, the state ratcheted up its education budget by $5.4 billion. Of that amount, $3.6 billion bolstered the state’s retirement coffers.
“State and local governments will continue to hike taxes, hit core services and make themselves ever less attractive to discerning families until the pension problem is fixed,” Berg said.