UIC professors David Merriman and Rachel Weber, experienced researchers on property taxes and government finances who led the report, said this is one of the first attempts to measure the impacts of exemptions on the county as a whole. In total, $15.8 billion worth of property value in Cook County was unavailable for governments to tax in 2021 because of those breaks, their research found.
That translates into about $1.6 billion in tax revenue, which governments simply shift onto other property owners…
To respond to tax spikes or inflation, state lawmakers have expanded breaks over the past half century. They now include eight types of homestead exemptions: homeowners, seniors, veterans, people with disabilities and those making improvements on their home. Exemptions typically cut down the taxable value of a home to provide relief.
The report noted the effects of these exemptions are not the same in every community. The tax base of the community matters:
Those unintended consequences also aren’t the case everywhere. The effects of homestead exemptions are negligible in cities and villages with a bigger industrial property base, like McCook and Bedford Park, with a concentration of more valuable properties like Winnetka or Kenilworth, or with a lower share of homeowners who qualify, like Chicago.
It sounds like this affects communities that do not have great tax bases to start with. Already behind, homeowner’s exemptions then contribute to a lack of community funds compared to other communities.
I would guess Cook County and Chicago area homeowners would point to the fact that they pay some of the highest property taxes in the nation. In a country that prizes homeownership, these exemptions help enable people to live in their homes. But, as the article notes, there are other ways to fund public goods and services. This reminds me of Prop 13 in California which since 1978 has limited property tax revenues. Without those local tax revenues, governments have sought out other means.
Legally Sociable 