Our view: Adjustment to PTELL worth a look
It’s a shame that state Rep. Jack Franks failed in his initial efforts to persuade fellow lawmakers to make local governments hold the line on – or better yet, decrease – tax levies when property values decline.
House Bill 3793, which would have affected all counties where the now misnamed Property Tax Extension Limitation Law is in effect, went down in flames in November, 34-73.
Franks, a Marengo Democrat, now is back with House Bill 4608. He and Republican Rep. Kent Gaffney are co-sponsors of the county-specific bill aimed at achieving the same end.
Franks told the Northwest Herald that he was inspired by a fellow legislator who suggested last fall after his first bill failed that he should attempt a pilot program for his home county.
We have our doubts that this bill has any better chances of success than its predecessor. It’s not because it’s without merit, and we applaud Franks for continuing to shine a light on an unintended consequence of PTELL.
Under the law, annual tax extension increases are limited to the rate of inflation or 5 percent, whichever is less. The cap protected property owners while values were rising. But in recent years, as property values have plummeted, the law’s guarantee that taxing bodies may collect at least the inflationary increase has had the net effect of pushing tax rates up.
So, despite having lost in many cases tens of thousands of dollars in property value, most area homeowners are paying more in property taxes.
Government officials often argue that if they do not take advantage of collecting the full amount available to them, their maximum allowable tax rates will erode, potentially putting them in financial peril down the road.
Many of our residents are in financial peril now. Rising property taxes against falling home values is beyond salt in residents’ wounds.