Franks property tax reform bill passes

State Rep. Jack Franks issued the following news release on Tuesday:

Franks passes landmark property tax reform

Advances relief to struggling homeowners

SPRINGFIELD – Following through on his commitment to provide relief to overtaxed property owners, state Rep. Jack Franks (D-Marengo) overcame massive opposition from taxpayer-funded lobbyists and passed groundbreaking legislation to prevent automatic property taxes increases through the House of Representatives on Tuesday.

“Real estate values have dropped dramatically in recent years, but the tax burden on those homes continues to rise unabated,” said Franks. “As Illinois residents fight to overcome a housing and mortgage crisis, today we acted to provide relief for homeowners struggling to get by.”

In 1991, state legislators passed the Property Tax Extension Limitation or tax cap, to slow the rapid increase of property taxes. Under current law, the ceiling of five percent or the rate of inflation on any increases went from protecting homeowners in boom times to harming them as real estate values have plummeted. More than 46 percent of all single-family homes with a mortgage in the Chicago area were under water in third quarter of 2011 and the percentage of homes with negative equity continues to rise.

“Government, at all levels, must look for opportunities to increase efficiency and do more with less – just like every family in America,” continued Franks. “Taxing bodies act as though they are victims when in fact homeowners are getting victimized by an unfair and outdated system. It should be fundamental that when property values decrease, property taxes should at the very least, not increase.”

In McHenry County, for example, taxing units raised their rates an average of 9.4% and that of 132 taxing bodies reviewed last May, only five lowered their rates and one kept the same. At the time, McHenry County also had a $47 million budget surplus, but still voted to increase property taxes.

While lobbyists representing local governments battled back an initial effort to provide property tax relief, Franks succeeded by amending Senate Bill 2073, sending the tax reform measure to the state Senate for approval. Franks’ legislation provides that if the value of the property for the current taxable year is less than the total in the previous year, then property taxes cannot be increased without a referendum. The reform does not diminish the revenues that local governmental units currently receive – rather it prevents automatic increases when property values decline.