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Tax cap bill fails House

Franks calls defeat ‘temporary setback’

Published: Friday, April 12, 2013 2:40 p.m. CDT • Updated: Friday, April 12, 2013 9:01 p.m. CDT

House lawmakers soundly defeated a bill aimed at preventing property-tax increases in years that property values are depressed.

The House voted Friday, 43-65, against House Bill 89, sponsored by state Rep. Jack Franks, D-Marengo. The bill sought to forbid governments subject to the tax cap from collecting inflationary increases in years their overall assessed value decreased, except by voter referendum.

Local taxing bodies are entitled on this year’s property-tax bills to a 3 percent increase over what they collected last year. While some local governments voluntarily held their levies flat, many raised their levies to capture the increase.

“I’m going to keep trying – I look at this as a temporary setback,” Franks said. “This is something worth fighting for for the taxpayers.”

About 60 percent of House Democrats and half of House Republicans voted against the bill, which was strongly fought by local government lobbying groups. House Minority Leader Tom Cross, R-Oswego, voted “present.”

All four of McHenry County’s GOP representatives – Mike Tryon, Barbara Wheeler, David McSweeney and Tim Schmitz – voted in favor of the bill.

The tax cap, or the Property Tax Extension Limitation Law, limits the annual increase that taxing bodies can receive to either the rate of inflation or 5 percent, whichever is less. State lawmakers imposed the cap on the collar counties in 1991 to rein in double-digit property taxes as home values started to soar, and five years later allowed voters in other counties to enact tax caps by referendum.

But when home values decrease – a scenario lawmakers never considered – the tax cap works for government and against the taxpayer by guaranteeing that taxing bodies can collect the inflationary increase.

Franks first filed the bill in June 2011 during the previous General Assembly, citing taxpayer outrage that their property-tax bills were increasing despite the fact their values had plummeted with the bursting of the housing bubble.

It cleared the House on the second try, but stalled in the Senate. Twenty-five of Friday’s no votes – 19 Democrats and six Republicans – came from lawmakers who had voted in favor last time.

At least four other bills – three in the House and one in the Senate – aim to freeze what local taxing bodies can levy for the next three to five years. But all four of them, one of which was filed by McSweeney, are languishing in committee and are considered dead.

Government lobbying groups that fought Franks’ bill include the Illinois Municipal League, the Illinois Association of School Boards and its related agencies, and Metro Counties of Illinois, to which the McHenry County Board belongs. Local governments pay their dues to these lobbying groups with taxpayer dollars.

The County Board is one of several governments that voluntarily held their levy flat to reject the 3 percent increase.

The groups argued that the legislation would hinder governments’ ability to keep up with rising costs of supplies, as well as unfunded state mandates and other expenses. Government lobbying groups typically oppose legislation that would lower members’ revenues, increase their expenses or take away local control.

The McHenry County Assessor’s Office fielded more than 10,000 assessment appeals for property-tax bills due this year. The number of appeals each year has set successive records since the housing bubble burst. By comparison, the assessor fielded only 677 appeals a decade ago.

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