Is property tax cap a good thing?

By John Patterson Daily Herald State Government Editor
Posted 7/13/2004


SPRINGFIELD -- Homeowners will see their property tax breaks increase and possible limits put on skyrocketing property assessments, but the savings might not match the hype given the new plan.

Gov. Rod Blagojevich on Monday signed into law a statewide plan that increases homestead exemptions to $5,000. In Cook County that's a $500 increase and a $1,500 increase in the other 101 counties.

That break goes into place immediately and could begin saving homeowners money on their 2004 property tax bills.

As for the cap on assessments, that debate now moves to county boardrooms across the state, where each of the

102 counties has 60 days to put the issue to a county board vote.

If the measure is approved, property assessments could not increase more than 7 percent per year.

Supporters praise the new law as a savior for senior citizens and others fearful of being priced out of their homes by nothing more than real estate market growth.

"When you think about owning your home, you save for a down payment, you figure out how you're going to meet your mortgage costs and you think about ways you can afford to improve your home," Blagojevich said.

"But the thing you didn't bargain for was that you do all of those things, and then the time comes when you can no longer afford your own home because the property taxes are way too high."

But critics warn it will ultimately result in reduced money for suburban schools and won't have a dramatic effect on the typical homeowner.

In Cook County, the 7-percent cap is expected to be approved today. Chicago and Cook officials led the push for the new law.

"Everywhere I go, people tell me how important this legislation is to them," said state Sen. Dave Sullivan, a Park Ridge Republican. "Clearly, there is a need for property tax relief in our area. We have tax caps, which do help keep property tax rates down and now we have this legislation, which should help keep property tax assessments at reasonable levels."

Kane County Board Chairman Mike McCoy also offered initial support for the concept.

"To me, the tax cap is one of the best things Springfield did. But people's tax bills are still rising," McCoy said.

Elsewhere, county leaders were hesitant.

"We don't have a clue what this means yet," said Suzi Schmidt, chairwoman of the Lake County Board. "Whenever you have an assessment freeze or cap, somebody else is going to pay. Somebody has to make up the slack."

DuPage County Board Chairman Robert Schillerstrom reacted similarly.

"The revenue will be the same. It rearranges who pays for it," Schillerstrom said. "We want to make sure we balance the benefits and the burden."

In McHenry County, assistant county administrator John Labaj expressed concern that capping assessments would merely shift a larger portion of the county's tax burden onto businesses, putting the county at a competitive disadvantage when it comes to economic development.

"We're in a dogfight already with a lot of states that are coming here looking to take our businesses," Labaj said.

Suburban school officials echo the concerns of assessment caps shifting the tax burden to businesses, but for different reasons. Businesses have proven to be very successful at mounting legal challenges to their assessments in courts and getting refunds from schools.

A recent Daily Herald look at how the tax breaks might affect the suburbs shows the savings are most likely to be a few hundred dollars for the typical homeowner. The increased homeowner exemptions would likely save homeowners between $90 and $125.

The 7-percent assessment cap would save a small group of homeowners $300 to $1,500 assuming their home values were increasing 10 percent annually.

• Daily Herald staff writers Chuck Keeshan, Patrick Waldron, Marni Pyke, Sara Faiwell and Rob Olmstead contributed to this report.