After a spring spent focusing on possibly bringing a graduated income tax to the state, Illinois lawmakers will soon be turning their attention to the other big tax bill affecting the state’s residents — property taxes.
Specifically, they’ll be looking at ways the state can provide some relief to property tax payers, even though property taxes themselves are imposed by local governments and the revenue from them finances local government operations.
Gov. JB Pritzker this week is expected to sign Senate Bill 1932, which creates a property tax relief task force. It will include representatives from Pritzker’s office and all four of the legislative caucuses.
Pritzker agreed to the task force after a couple of House Democrats threatened to withhold their votes from his graduated income tax proposal because they said it did not do enough to address high property taxes.
Lawmakers will be under intense pressure from the start. The bill creating the task force stipulates an initial report should be made to the governor and General Assembly within 90 days of the bill being signed. A final report has to be completed by the end of the year.
“I’ll hold out optimism that this might come up with some good suggestions on property tax reform, but since I’ve been in the General Assembly the last few years, the issue around property taxes seems to be something that we continue to like to talk about, but we really don’t take a lot of legitimate action on,” said Rep. Tim Butler, R-Springfield, a Republican appointee to the task force.
Sen. Andy Manar, D-Bunker Hill, the Senate sponsor of the bill, disagreed.
“I think the bulk of the work has been done, and the task force should look at the legislation the Senate passed,” Manar said.
That legislation was a proposal Manar offered as the graduated income tax was being debated. His idea was that if the state fully funded K-12 education programs in a year, school district property tax rates would be frozen in the upcoming year. Funding levels would be reviewed each year, and the entire plan would only take effect if the state moved to a graduated state income tax.
“That, to me, is a reasonable proposal that deserves a full debate in the Legislature,” Manar said. “I think that’s a good place to start for the task force. It doesn’t affect every piece of a property tax bill, but it would certainly impact the majority of a property tax bill.”
The Senate approved the bill on a party line vote, but it was never voted on in the House. Republican lawmakers in particular complained the proposal was full of loopholes and would never produce property tax relief.
Rep. Mike Murphy, R-Springfield, another appointee, said he thinks the focus should be on how the state can do a better job fulfilling its obligations to schools and local governments.
“I will be adamantly opposed for the state to tell somebody they have to freeze their property tax without giving them the money to fund these programs,” he said. “It’s not our job to tell (Springfield schools) how much money they should have to operate.”
He said he wants a review of unfunded mandates placed on all local governments.
“Unfunded state mandates is as big a problem as us not living up to our obligations in not funding things,” he said.
Butler said he, too, wants a focus of the task force to be reforming mandates.
“My bigger concern is that the governor and the Democrats are going to use this as a tool to try to justify the graduated income tax,” he said. “There’s been some discussion that if you raise people’s individual income tax, it will directly result in property tax reductions for people, which I don’t think is legitimate at all.”
Butler said the task force could look at the property tax extension limitation law to make it more effective. And mandate relief would go beyond just the well-documented mandates on schools, he said.
“I see all of these other entities that are on my property tax bill,” butler said. “We pass legislation every year that impacts them one way or another. At the end of the day, if we are mandating a local government to take action, it’s most likely going to cost more money.”
Former Gov. Bruce Rauner talked of mandate reform, but often in the context of changing collective bargaining laws for public employees. Butler said those ideas won’t be part of the discussion considering the reality of a Democratic-dominated Legislature and a Democratic governor.
Manar said there are limits to how much relief can be obtained through altering mandates.
“We accomplished significant mandate relief in school funding reform,” he said. “Mandate relief alone is not going to lower property taxes. That’s simply diverting attention to something other than the difficult task at hand.”
Manar said that if the Republicans have a mandate relief proposal that will cut property taxes, “I would love to see it. They should have filed that years ago.”
The bill doesn’t limit the number of lawmakers who can serve on the task force. The House Republicans are the only caucus to appoint anyone before the bill has been signed. They’ve appointed 15 of their 44 members.
“I’d say the more, the merrier,” Manar said. “I would say the task force should take the approach that everyone’s ideas are welcome.”