Property taxes since 2000 have risen twice as fast as consumer prices in Cook County, Illinois, with the steepest increases in suburban Chicago, according to a Heartland Institute analysis released this week.
With 5.2 million residents, Cook County includes the City of Chicago and is the second-most populous county in the nation. Huge tax increases or municipal bankruptcies are likely unless major reforms in how local governments operate are made, said John Nothdurft, report author and director of government relations for The Heartland Institute, which publishes Budget & Tax News.
“The average property owner pays 48 percent more in property taxes today than a decade ago, with some home owners seeing triple-digit increases,” reported Nothdurft. “The property tax burden will skyrocket in the next decade, despite stagnant or declining home prices, because of growing public pension and benefit obligations.”
48% vs. 22%
The average 48 percent increase in Cook County property tax collections dwarfs the 22.5 percent increase in the Consumer Price Index for the Chicago-Gary-Kenosha Area, according to the U.S. Department of Labor Bureau of Labor Statistics.
According to Nothdurft’s analysis, from 2000 to 2010:
- Property taxes collected for all taxing districts in Cook County rose from $7.89 billion to $11.69 billion, an increase of 48 percent. This is twice the rate of inflation during that period.
- Suburban municipalities increased property taxes by 75 percent, taxing agencies within the City of Chicago by 44 percent, and the Metropolitan Water Reclamation District by 29 percent. Property taxes levied by Cook County government remained flat.
- School districts, which collect the largest portion of property taxes, increased property taxes by 58 percent. Twenty-seven school districts more than doubled their property taxes in the past decade.
Property tax bills list taxes collected for between 12 and 20 local governments that receive property taxes each year, depending on where in the county the particular property is located. Cook County government itself accounts for only about 6 percent of the total amount collected.
“This data is a welcome addition to the transparency effort that’s so important in assessing government, and it shows a shocking amount of tax revenue that’s being squeezed out of everyday people during some of the toughest economic times in decades,” said Andy Shaw, president and CEO of the Better Government Association, who attended the press conference announcing the study.
“Government is gorging while people are struggling,” Shaw said.
He noted Chicago and Cook County government dominate news coverage in the area, leaving the more than 500 smaller governments that levy property taxes to “operate under the radar screen” and get away with spending that many suburbanites might oppose if they knew what is happening.
Much of the spending is being driven by pension and health insurance costs for government workers and retirees. Tax increment finance districts, which divert property tax revenues to areas designated by local officials for development, are also adding hundreds of millions of dollars to local property tax bills.
‘Reforms Necessary Now’
Ted Dabrowski, vice president of policy for the Illinois Policy Institute, said, “While the focus is often on Chicago, this information shows that suburban Cook County taxpayers have been facing increasingly higher property taxes. Significant spending and pension reforms are necessary now to protect taxpayers from the burden of even higher taxes in the future.”
Cook County Treasurer Maria Pappas said, “Taxpayers ask me why their tax bill has steadily increased, especially surrounding their school’s tax portion. They can see that the county’s portion of the property tax bill has not increased in over 17 years and that taxation begins at the local level of government. Make no mistake, tax increases can be controlled when property owners understand the real cost to them of local government debt.”
Pappas and her staff helped The Heartland Institute collect public tax records based on Freedom of Information Act (FOIA) requests Heartland filed. The conclusions and interpretations are solely the responsibility of The Heartland Institute.
Steve Stanek ([email protected]) is a research fellow at The Heartland Institute and managing editor of Budget & Tax News.
“Property Tax Levies in Cook County: An Analysis”: http://heartland.org/policy-documents/property-tax-levies-cook-county-illinois-analysis