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Editorial: How property tax increases became a new third rail in US politics

The Editorial Board, Chicago Tribune on

Published in Op Eds

If he thought he was selling something that anyone wanted to buy, Chicago Mayor Brandon Johnson sure got a wake-up call. In his initial 2025 budget proposal this past fall, Johnson requested a shocking $300 million property tax increase, saying he was “asking families to lean in and do a little bit more.”

Failing to convince said families, he then halved his request to $150 million, and then he tried cutting it even more to $68.5 million. The wheels of “best option” hit the road of reality.

The only acceptable number turned out to be zero, as frustrated Chicagoans sent a strong message to their local politicians about piling on more property tax increases.

In the end, increased fees and taxes of various stripes were preferred by aldermen, some of which will be paid by businesses but others by the very same people who would have been paying the property tax increases. It’s notable how much opposition brewed to any increase in the levy on properties, even increases designed to account for inflation.

Property owners have had enough. And not just in Illinois.

House prices have soared in many areas across the U.S., and property taxes have soared along with them. Rising home values in southern Cook County pushed up property tax bills by nearly 20% after the most recent reassessment. Equally infuriating is the weight of Illinois’ 8,500-plus units of government, which reflexively push for ever-more tax revenue to fund their fiefdoms.

Savvy pols have seen an anti-tax buzz saw coming for years now. On Election Day in Illinois, mass frustration led 60% of voters to support an advisory ballot measure that would fund property tax rebates by soaking the rich.

In eight other states on Nov. 5, voters approved permanent measures — not advisory ones like in Illinois — providing some form of property tax relief. Georgia backed a constitutional amendment that caps assessments for all current homeowners. Florida pegged a tax exemption to annual inflation rates. Wyoming adopted a constitutional amendment so lawmakers can pass lower rates for homes than for other types of real estate.

America hasn’t seen a tax revolt like this since the 1970s, another period of high inflation, when California’s Proposition 13 shocked public officials who assumed taxpayers had no recourse but to pay up. Mayor Johnson entered office with the same oblivious attitude, backed by progressive supporters vowing to squeeze billions more out of Chicago taxpayers under the notorious banner, “First We Get the Money.”

The Chicago budget that a divided City Council narrowly approved in mid-December shows how far out of touch Johnson and his radical buddies remain. Rather than finding efficiencies to provide the relief that taxpayers are demanding, the mayor and 27 aldermen who grudgingly supported him instead resorted to searching the city’s couch cushions for spare change.

They jacked up the shopping-bag fee from 7 cents to a dime, and arbitrarily raised taxes on parking garages, streaming services, car leases and software licenses. They approved more of those hated speed cameras, which now are about revenue, not safety, and are expected to sting motorists for an additional $11.4 million in the coming year. Their biggest revenue booster comes from “surplus” tax increment financing funds, which will be spent on bloated bureaucracy rather than the pro-growth investments that TIFs are supposed to support.

 

Shortsighted? You bet, and unsustainable too. As this page has pointed out, Johnson’s budget scrapes for nickels and dimes even as billions in COVID-19 relief funds continue to evaporate. It postpones a reckoning for less than a year and imposes regressive measures like higher bag taxes that hit the hardest on poor people.

By allowing costs to soar far beyond the inflation rate, public officials have turned property taxes into a political third rail across the country. Is it any wonder that homeowners object to much higher bills when nothing about their properties or the public services they receive has changed?

In theory, property taxes are an economically efficient way for governments to raise money — arguably more efficient than sales taxes, state income taxes or the arbitrary fees that Chicago has seen fit to impose.

Alas for big-spending politicians, they’re also highly visible, especially now that the federal tax deduction for state and local taxes has been sharply limited (and we’ll have more to say about that this new year).

Most homeowners know how much they pay each year, and what services they get for that money, which makes property taxes admirably sensitive to local preferences. In contrast, few can say how much sales tax they pay over a year, or what benefits they receive in return.

Illinois is neck-and-neck with New Jersey for the worst property tax burden in the country, and if the Mayor Johnsons of the world keep ignoring the legitimate grievances of voters, action in other states shows what can happen next — none of it ideal.

Fed-up voters can impose limits on real estate assessments, which would tamp down tax increases in the short run. Over time, however, those limits can lead to unfairly high taxes for new homes, while artificially low taxes lock longtime residents into their properties by making it too costly to move.

Similarly, rate limits that restrict tax increases might sound good on the surface but don’t reduce the existing tax burden from sharply higher property values. As for rebates at the state level, as Illinois’ advisory referendum envisioned, those tend to reward jurisdictions that have high taxes while in effect punishing those that have kept taxes low.

The solution is obvious: Local governments and agencies have to cut spending to levels that taxpayers can tolerate. Evidence is growing that politicians who ignore that message will push an aggrieved electorate to slap on the handcuffs and vote out the big spenders.

_____


©2025 Chicago Tribune. Visit chicagotribune.com. Distributed by Tribune Content Agency, LLC.

 

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