House approves homeowner tax break

By John Patterson, Daily Herald State Government Editor
Posted Thursday, May 6, 2004

SPRINGFIELD - All homeowners in Illinois would get a $5,000 discount on their home values and those experiencing skyrocketing increases could see even greater savings under a plan the Illinois House approved Wednesday.

It was the latest legislative move designed to address rapidly rising home values in Cook County and the suburbs that are translating into higher property tax bills. Currently, Cook County homeowners receive a $4,500 discount off their home's value for determining taxes. In the other 101 counties, the discount is $3,500.

If the House-approved plan becomes law, the discount would increase to $5,000. The proposal also expands eligibility and discounts for senior citizen property breaks.

Further, it would let county boards vote to freeze home-value increases to 7 percent for taxing purposes. The maximum discount would be limited to $20,000 off the home's value.

State Rep. John Fritchey, a Chicago Democrat, said the legislation is designed to protect people from soaring tax bills that force them from their homes.

The proposal was approved 77-39, but many questions remain. Various forms of tax relief have passed the House or the Senate, but the two chambers have yet to agree on a final version. Unless they do, nothing will be sent to the governor.

Critics contend an inherent flaw with all the plans so far is they merely slide millions of dollars in tax burden onto renters and businesses.

"The vote comes down to this - legislators think constituents want property tax breaks more than they want jobs," said Jerry Roper, president and chief executive of the Chicagoland Chamber of Commerce.

The impact on schools also is drawing opposition.

State Rep. Ed Sullivan Jr., a Mundelein Republican, said Waukegan schools stand to lose $300,000 if it becomes law and Lake County adopts the 7 percent limit.

The problem for schools would occur because the state would continue to use the full property values when computing state financial aid for public school districts. So in counties where property values are soaring, it would look to the state like the area's wealth is increasing dramatically so fewer state tax dollars would go to those schools. But because of the local caps on property values, local school officials wouldn't get full access to local tax dollars.

Sullivan said that will lead to more tax increases being put before voters.

"It's an endless cycle," Sullivan said. "That's the unintended consequence of this."