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Report: Illinoisan property tax bills grow faster than incomes, home values

Residential property tax bills in Illinois have grown 268 percent since 1990. Median household incomes have grown just 127 percent and home values 114 percent.

The property taxes Illinoisans pay are punitive any way you cut them, according to Wirepoints’ latest report on Illinois property taxes.

Property tax bills as a share of household incomes are up more than 60 percent compared to 1990. In 2020, property taxes ate up 5.9 percent of median household incomes in Illinois. Thirty years ago, property tax bills consumed just 3.6 percent of incomes. The tax rate has jumped despite the 1991 passage of PTELL, a law meant to limit property tax increases in Illinois.

Under a second measure – as a percentage of home values – Illinois property taxes are now the highest in the country. ATTOM Data Solutions calculated Illinois’ effective tax rate as 1.86 percent in 2021. New Jersey was second.

And as for their impact on house prices, property taxes have contributed to Illinois suffering the nation’s third-worst growth in inflation-adjusted home values over the last 20 years, up just 3 percent. In contrast, states like Florida and Texas saw their values grow more than 40 percent.

“Over the last 30 years, Illinois property tax bills grew far faster than household incomes. That’s left Illinoisans with less money in their wallets for essentials like groceries, tuition, mortgages, and retirement contributions,” says Ted Dabrowski, President of Wirepoints. “As a result, Illinoisans’ home values have stagnated, making Illinois a national outlier once again.”

Wirepoints also looked at tax data county by county, identifying places with the largest burdens and how they’ve changed over time. Lake County residents are burdened with the highest property tax rates in Illinois: 7.8 percent of income. DuPage County and Will County are 2nd- and 3rd-highest, respectively.

Other facts in the report include:

As a share of incomes:

  • The average household now owes nearly $4,400 in residential taxes each year, up from $1,200 in 1990.
    Homeowners in Lake County are burdened with the highest property tax rates in Illinois: 7.8 percent of income. The average Lake County property tax bill is now over $7,800 per household.
  • Homeowners in Cook County pay an average bill of $4,751, equal to 6.6 percent of their income – the 7th-highest tax rate in the state.
  • Pike County residents, though they pay relatively low taxes, have seen their tax rates jump 137 percent since 1990 – the biggest jump of any county.

As a share of home values:

  • Tax bills per household have grown 268 percent since 1990, while average home values have grown only 114 percent. That’s 2.4 times more.
  • Illinoisans paid the nation’s highest property tax rate (1.86 percent) as a share of home values in 2021, more than double what residents in Missouri (0.86 percent) and Indiana (0.77 percent) pay and triple what Kentuckians (0.64 percent) pay, a study by ATTOM Data Solutions found.
  • The Lincoln Institute Land Policy found that Aurora, Illinois hits its residents with an effective tax rate of 3.25 percent – the highest of the 53 big cities in its study.

“The state’s punishing tax numbers – and Illinois’ outlier position nationally – make an overwhelming case for reforming the cost drivers of Illinois’ property tax crisis, from pensions to public sector collective bargaining laws to education spending,” says Ted.

“Pension reform, starting with a constitutional amendment to the state’s pension protection clause, collective bargaining reforms and local government consolidation are the only ways to structurally and permanently reduce Illinoisans’ property tax bills.”

“If nothing is done, residents will continue to flee from the highest property taxes in the nation.”

Read Wirepoints’ full report:

A compilation of property tax burdens by county is available here.

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