SPRINGFIELD — As legislation to freeze property taxes remains stalled in the state legislature, some Republican senators are suggesting that more voters be given a chance to lower property taxes.
Their idea is to give voters in counties covered by property tax limits the ability to put a referendum on the ballot to lower their taxes. Voters in counties that are not covered by the Property Tax Extension Limitation Law (PTELL) already have that ability.
“This would restore to any counties that are under PTELL this ability for people to be able to go to referendum to lower their own property taxes,” said Sen. Dan McConchie, R-Hawthorn Woods, the principal sponsor of the proposal. “This is simply trying to restore to people the ability ... to keep out-of-control local governments in check.”
There are currently 39 counties in Illinois covered by PTELL, including Sangamon, Menard, Logan, Christian, Macoupin and Morgan. Taxing districts in those counties are limited in the amount they can increase their property tax extensions, or the amount of property tax money they collect in a year. They can increase those extensions by 5 percent or the rate of inflation, whichever is less. Voters also can agree to raise taxes above those limits by referendum.
PTELL limits the growth in property taxes, but doesn’t stop it. Citing figures from the state Department of Revenue, McConchie said that since 1990, property taxes in PTELL counties outside the Chicago area have grown by 260 percent. In non-PTELL counties, the growth was 222 percent over the same period.
Counties outside of the Chicago area that have PTELL approved it by referendum. But, McConchie said, when voters approved PTELL, they gave up the ability to try to lower property taxes through referendum.
Although voters in non-PTELL counties can try to cut their taxes, it doesn’t happen very often. McConchie could only cite two cases were voters have done it. Voters approved a cut in the general fund tax rate for Madison County in 2016. In 2013, three separate rates for the Collinsville recreation district were also cut.
“I talked to the folks in those two efforts,” McConchie said. “They said it was hard to be able to get those signatures.”
To get a tax cut referendum on the ballot, supporters have to gather signatures equal to 10 percent of the votes for governor that were cast in that taxing district in the last election. In Sangamon County, there were 71,504 ballots cast for governor in 2014. That means more than 7,100 signatures would have to be collected to try to cut taxes in a district that covered the entire county.
“It’s a pretty high standard,” McConchie said of the signature requirement. “We believe there needs to be an appropriate barrier just in order to ensure that you don’t have people who are willy-nilly trying to undermine local units of government.”
The idea comes at the same time Gov. Bruce Rauner wants school districts to begin paying teacher pension costs now covered by the state. And the whole concept of the state trying to shift costs to local governments is a reason why the Illinois Municipal League is opposed to the idea.
“We have the legislature pushing more costs down on local governments and then tying their hands,” said Brad Cole, IML executive director. “We think the village board or the city council in those communities should be making some of those decisions.”
Cole also said that if the idea is approved, he would expect regular efforts to be mounted to cut taxes “without the realization of what happens if it passes. How do you pay the bills that are being forced from the state onto local governments?”
McConchie’s idea is proposed as an amendment to Senate Bill 2670. It’s been assigned to the Senate Revenue Committee, but a hearing for it has not been scheduled.
Three of the counties in Rep. Tim Butler’s district would be affected by the proposal. Butler, a Republican from Springfield, said he hasn’t taken a close look at the proposal yet, but understands it could be popular with voters.
“I would imagine it would be something that would have a fair amount of support,” Butler said.
Butler said he has a good relationship with local taxing bodies that are reliant on property taxes and understands many are strapped for funding.
“I think people are frustrated with the tax rates and property tax figures into that,” he said. “It’s such a popular issue politically that I can certainly see a lot of members would possibly support something like that.”