(The Center Square) – Illinois homeowners, and those who pay through rent, paid a higher tax rate than all but one other state in America.
At 2.05 percent of the average market value of their home, Illinois owners shelled out a higher portion of their home’s value in property taxes than any other state in 2018 with the exception of New Jersey. That’s according to an annual report from the nonprofit Tax Foundation.
“Property taxes tend to be a really stable source of revenue because it’s a little harder for someone to pack up and move than it is for them to change where they go shopping,” said Janelle Cammenga, tax analyst for the Tax Foundation. “However, you might look at property tax bills before moving somewhere if you’re going to move because that is going to make a big difference in how affordable your house is going to be.”
When split by county, Illinoisans in suburban Chicago pay much more in annual property taxes than elsewhere in the state. This averaging between the metropolitan area and rural Illinois likely means residents of Chicago area pay a higher average percentage of their home’s value to local government than most of New Jersey.
Property taxes, Cammenga said, are one of the most transparent forms of taxation because it’s a semi-annual payment or a monthly lump sum that’s often split among monthly mortgage payments, not accumulated little-by-little as with sales taxes.
The majority of Illinois’ property taxes go to fund local school districts. Illinois pays for a smaller percentage of local public education than nearly any other state.
“Because so much of their education funding comes from property taxes and not state transfers, that does make those a bit higher,” Cammenga said.
Advocates of the progressive income tax ballot initiative has said that the additional revenue from higher income taxes for higher earners could go toward making the state’s portion of local school funding larger, but the proposed amendment contains no language that require the state to do so.
Illinois overhauled its education funding formula in 2018 and committed to increasing state-based funding annually.