Local government lobbyists paid by your tax dollars are fighting hard to kill a bill aimed at limiting property tax increases in a declining housing market.
Interest groups representing municipal, county, school and township governments have been urging members to contact their legislators to oppose House Bill 3793, which forbids governments under the tax cap from collecting more in property taxes in years that their total assessment decreases.
State Rep. Jack Franks, D-Marengo, said he filed the bill after the first installment of McHenry County property taxes came due in June, in response to constituent outrage over increasing property tax bills despite plummeting home values.
“The groups who are opposed to this think they’re immune to the realities of what’s happening in the world,” Franks said.
The bill amends the Property Tax Extension Limitation Law to prevent any subject taxing body whose total assessed value decreases from the previous year, excluding new construction, from collecting an increase. It would essentially set that district’s tax cap to zero percent, unless the voters decide in a referendum to approve an increase.
The PTELL, or tax cap, limits the annual increase that taxing bodies can receive to either the rate of inflation or 5 percent, whichever is less. McHenry County and the collar counties have been under the tax cap since 1991.
Franks’ bill passed the House Revenue Committee on Tuesday, 6-1, with one voting present, and a House vote could come when the fall veto session reconvenes Nov. 8. A vote scheduled for Thursday was delayed by requests from Reps. Roger Eddy, R-Hutsonville, and Linda Chapa LaVia, D-Aurora, for a total of 10 different notes on potential local impact. Eddy is superintendent of the Hutsonville unit school district.
Groups such as the Illinois Municipal League, the Illinois Association of School Boards, and Township Officials of Illinois said that Franks’ proposal would be a disaster.
Municipal league spokesman Joe McCoy said governments that lose the inflationary rate of increase would suffer because of annual price increases for goods and services. The school association said that the bill could further hurt school districts because property tax revenue is taken into account in the state school funding formula.
Also opposing the bill are Metro Counties of Illinois, of which McHenry County government is a member, and the McHenry County Council of Governments, which represents 23 municipalities and the county.
“This is a direct threat to the continued operations of local government, if we’re getting to a point where the General Assembly is going to limit the property tax authority of local governments,” McCoy said. “Unless the General Assembly can cap government expenses, such as gas, the goods and materials needed to conduct municipal business, infrastructure improvements, salaries and pensions, this is a really short-sighted move.”
The groups’ lobbying efforts are funded through dues paid for by government revenue, meaning tax revenue. The amounts each government pays typically depends on their size and population or school enrollment.
Franks said that taxpayers should be galled that their tax dollars are fighting a tax relief measure.
“I don’t think that a taxpayer-funded lobbyist should be lobbying government for higher taxes,” Franks said. “It’s appalling that they don’t see the conflict.”
The tax cap, which protects homeowners when home values are rising, works against them when values fall.
The tax cap guaranteed this year that taxing bodies can collect 2.7 percent more, based on the 2010 rate of inflation, than they did last year. Many of the county’s taxing bodies raised their rates an average of 9.4 percent to ensure they got the increase, according to tax records. A Northwest Herald review of 132 taxing body records show that all but six raised their rates.
Many property owners are challenging their assessments as a result. County Supervisor of Assessments Robert Ross estimates his office will receive between 8,500 and 9,000 challenges. That would be a significant increase from the 5,900 the office received this year, which itself was a 40 percent increase from the previous tax year.
An August investigation by the Northwest Herald showed that many of these lobbying groups also are fighting to roll back reforms to the state Freedom of Information and Open Meetings acts, also with taxpayer-funded lobbyists.