A bill passed by the Illinois House — with the support of two local legislators — would freeze property taxes permanently for non-home rule government agencies in Illinois.
House Bill 696, which on April 21 passed the House 71 to 31, with five members voting present, would discontinue the annual practice of non-home rule units of government extending their tax levies by 5 percent or the consumer price index, whichever is less.
The bill’s chief sponsor is state Rep. Jack Franks (D-63rd), of Woodstock.
Local elected leaders, whose budgets are already stretched thin, are none too happy about the proposed bill, which would force a referendum for any type of tax levy increase.
“It would effectively mean that taxing districts would not even be getting inflation increases in the levy,” said Riverside Village President Ben Sells.
The CPI in recent years has been less than 2 percent in six of the last eight years, meaning the ability of non-home rule units of government to extend their tax levies has been significantly curtailed. The CPI in 2014 and 2015 was 0.8 percent and 0.7 percent, respectively.
But even with increases in the levy as low as 2 percent, said Sells, the additional revenue is critical.
“It goes directly to the bottom line of the cost of services,” Sells said.
Brookfield Village President Kit Ketchmark said the tax freeze legislation would do nothing to address the state’s budget problems but would continue to require non-home rule taxing bodies to fund mandates over which they have no control.
“I don’t know what problem it solves,” Ketchmark said. “How does it help the state make up a $4 billion deficit in its budget?”
North Riverside Mayor Hubert Hermanek Jr. said the legislation would not hurt that village nearly as much, since property taxes make up such a small portion of the village’s annual revenue. But for municipalities without large commercial districts to provide sales taxes, the annual property tax levy extension is a vital revenue stream.
Non-home rule units of government include municipalities with populations under 25,000 (unless the voters have approved home rule status), school districts, park districts and library districts, among others. Brookfield, North Riverside and Riverside are all non-home rule communities. Cook County, the only home rule county in the state, wouldn’t be affected.
State representatives Michael Zalewski (D-23rd), who represents parts of Riverside and Brookfield, and Silvana Tabares, who represents Riverside south of the BNSF tracks, voted in favor of the bill.
State Rep. Elizabeth Hernandez (D-24th), who represents a small portion of Riverside and parts of Brookfield, voted against it. State Rep. LaShawn Ford (D-8th), who represents all of North Riverside and parts of Brookfield, voted present.
Zalewski, a Riverside resident, said he voted for the bill, which had been stalled in the House since last May, as a way to respond to Gov. Bruce Rauner’s call for property tax relief, which was identified as an issue in his Turnaround Agenda following his election in 2014.
“I think one of the overarching things that Gov. Rauner said, one of the things he wants to address, is property taxes,” Zalewski said, adding he believed that a final state budget solution would include “a property tax fix.”
“If we’re going to come together, we need to have that dialogue,” Zalewski said.
A day before the House voted to approve the non-home rule tax freeze bill, state reps failed to pass sister legislation: House Bill 695, which sought to freeze property taxes in home rule communities. While the measure got a majority of votes in favor, it needed three-fifths to pass. Zalewski voted against the home rule tax freeze, as did Hernandez and Ford. Tabares voted in favor.
Zalewski said the home rule freeze wasn’t appropriate because “home rule units got approval from voters to manage their own finances. To me, that was a bridge too far.”
Attempts to reach Tabares, Ford and Hernandez were unsuccessful.
House Bill 696 is now in the state Senate’s Assignments Committee. What legislators in that body intend to do with the legislation is unclear. There is some belief that the bill will die in the Senate.
Sells surmised that the law might be able to be used as leverage to get a state income tax increase passed, which would help the state’s budget issues. But that wouldn’t necessarily help non-home rule agencies, which might not get a share of that increase.
“Municipalities and school districts are now on the short end of the stick,” Sells said. “Then it’s a shell game to take money away from municipalities and school districts.”
State Sen. Don Harmon (D-39th), the senate pro tempore who is on the Assignments Committee, said colleagues are carefully analyzing the bill before advancing it.
Harmon said there are technical problems with the bill, such as how it would affect tax levies that were already under way. There is also a failure to recognize outstanding bonds that need to be paid and secured by promises related to the levy.
He does not want to create a wave of defaults on outstanding bonds, and there is also some concern about the impact the law would have on tax levy extension referendums.
Frustration over property taxes may very well be the focus of the bill, Harmon said, but it seems to be a bit heavy-handed. He said the frustration is understandable, especially in a period when home values have gone down or stayed flat.
Attempts to reach state Sen. Steven Landek (D-12th), who represents part of Riverside and Brookfield and who is also the mayor of a non-home rule community, were not successful.
Deborah Kadin contributed to this report.
