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New Study Shows Illinois Has Second Highest Property Taxes In Country

A new report shows that Illinois property owners pay the second-highest property taxes in the nation and about twice the national average.

 

It's not the first time the state's property taxes have made news, but lawmakers in Springfield still don't appear to have a consensus on how to reduce them.

 

The Land of Lincoln was ranked No. 50 out of 51, behind only New Jersey in consumer finance website WalletHub’s latest analysis of state property taxes. Illinois landed the same spot as the year before.

 

Analyst Jill Gonzalez said in addition to real estate taxes, the report also looked at the taxes people pay yearly on vehicles. Although Illinois doesn't have an annual tax on vehicles outside of registration fees, that wasn’t enough to lower the state’s overall ranking.

 

“So just because there’s not necessarily a vehicle property tax does not mean that’s enough to offset to the huge tax when it comes to real estate,” Gonzales said.

The national average for property taxes was around $2,280. Illinois’ average is nearly double that at $4,476.

Tax professional Michael Leonard of Leonard and Associates said Illinois’ high property taxes, and the inability to deduct them from federal taxes, is one reason some young people are putting off homeownership.

“‘Why and I going to buy a house. I’d rather just rent,' ” Leonard said. “And that’s what millennials are doing these days. They’re not buying anything. They’re moving from place to place renting. I think the cornerstone of our economy is real estate.”

Among other reports, Illinois has also been listed as the second most expensive property tax state by Attom Data Solutions.

State Rep. Michael Zalewski, D-Riverside, chairs the House Revenue and Finance Committee. He said property taxes are a problem that needs to be addressed this session “through innovative ways like changing the way we look at properties [or] whether it’s the good old fashion increase the homeowners' exemption.”

He said there’s not a clear path yet, but some proposals call for property tax exemptions for different populations, such as disabled World War II veterans or their surviving spouses.

Freshman state Rep. Deanne Mazzochi, R-Elmhurst, said that’s not the answer.

“The answer is when you have a systemic problem you prepare for a systematic solution,” Mazzochi said. “One of the whole reasons why we're in the mess we are in today in Illinois is because we do try to keep thinking of ‘well we like this group today and this group today and we’ll give this favor, that favor’ and we don’t actually plan consistently and coherently for what’s going to be sustainable for the future."

As local governments are spending more of their share of property taxes on pensions, Mazzochi said lawmakers should consider her proposed constitutional amendment to remove the state’s pension protection clause, which would allow for promised benefits to be reduced to sustainable levels.