Property Tax Relief Task Force Draft Report
In our October 7, 2019,
News and Views
), ISACo reported on the activities of the Illinois General Assembly's Property Tax Relief Task Force. In particular, ISACo’s participation in one of the subcommittee hearings at the request of the Task Force.
The 36-page draft report includes three sections. The first section provides a general overview. Section two explains Illinois’ property tax system. Section three includes recommendations for reducing property taxes.
Of particular interest to local government officials are the recommendations from each of the Task Force’s Subcommittees. These recommendations, available below, may eventually become legislative initiatives. In some cases, a recommendation was embraced by more than one subcommittee. These ideas have been assigned to a single subcommittee in the summary below.
School Funding Subcommittee
- Provide additional power to the Comptroller to effectively collect information and perform audits on local governments for purposes of facilitating potential consolidations via better decision-making.
- Close the loophole allowing districts to engage in continual bonding after a bond issue has expired.
- Allow school districts to petition for increased state funding to lower their levy.
- Mandate that school districts with significant cash reserves must either abate the excess reserves by lowering the levy or identify the purpose and utilization timeline of the funds.
- Instruct the Illinois State Board of Education (ISBE) to establish best practices for school districts with regards to debt and reserve ratios and mandate long-term planning goals to assess the financials of a district.
- Identify new revenue streams to fund education and the Evidence Based Model to shift the financial burden away from property taxes.
- Consolidate school districts into unit school district allowing both primary and high schools to be operated under the same district control.
- Mandate that 25% of all newly-created Tax Increment Financing (TIF) District funds be set aside for school districts.
- Release all uncommitted TIF funds to public service providers if not used within five years.
Property Tax Extension Limitation Law (PTELL) Subcommittee
- Allow “recapture” of lost opportunities for tax extension increase by extending ability to compute current PTELL limits as if the maximum levy was taken within previous years. This policy recommendation was submitted by ISACo.
- Consider allowing voter referenda to lower taxes in all PTELL taxing bodies.
- Study and remove, spread out or limit growth elements in the PTELL formula for new construction and possibly TIF expiration, in order to reduce growth and volatility in the tax burden.
- If the overall Commission wishes to propose a Tax Freeze, extend PTELL to all home-rule and non-home rule taxing districts, and establish 0% CPI and allow 0% for other growth rates, using the PTELL formula. (See SB 0316, 2015). If the overall Commission wishes to propose a Reduction to previous lower tax rates, then one simple potential move would be to allow the PTELL formula to calculate a new extension based not on the current year extension, but on the lowest extension of the previous five years.
- Identify new revenue streams to fund education and the Evidence Based Model to shift the financial burden away from property taxes. Both subcommittees recommend expanding the sales tax base to achieve this goal.
- Do not rule out eliminating PTELL entirely and relying on local governments and local voters to produce responsible funding and taxing levels.
- Enact SB 1300 (now P.A. 101-0610): Consolidation of nearly 650 downstate and suburban pensions into two, enabling greater investment power and alleviating the burden of property tax payers. After the subcommittee delivered their recommendations, the bill was signed into law December 18, 2019.
- Explore alternative methods of amortization so as to provide greater transparency regarding the level of funded liability as well as the true amount of annual employer contributions necessary to meet the long term funding goals of the pension fund.
Assessments and Exemptions Subcommittee
- Increase homestead and senior exemptions in the collar counties to the same levels as Cook County. All other counties should have a right to increase their exemptions to the same levels by county board.
- Provide properties that qualify for a homestead exemption a 10% state rebate on the total amount of the property tax bill.
- Share industrial and commercial assessed value across the county for school funding.
- Increase training requirements of township assessments who represent townships with over $1 billion of valuation.
- Pursue data transparency in the assessment process to ensure fair and accurate assessments.
- Fund the Property Tax Appeals Board (PTAB) to its required levels to complete its backlog of appeals.
- Explore the possibility of moving industrial and commercial appeals in Cook County away from PTAB and place them under the sole authority of the Circuit Court.
- Extend the assessment appeals timeline from 30 days to 90 days.
Social and Economic Disparities Subcommittee
- Restructure the Long-Time Occupant Homestead Exemption to assist residents in rapidly gentrifying areas.
- Remove financial bonus incentives for assessors paid by the State of Illinois for non-farm assessments, as this is a conflict of interest.
- Ensure that assessors are using a new valuation model based on fair practices as recommended by the International Association of Assessing Officers and refund erroneous assessments or overpayments.
- Provide homeowners that have been disenfranchised to the point of losing their homes with access to a land records audit. Additionally, place homes that have been foreclosed upon into a land bank rather than selling them through auction, allowing these families to regain assets that were improperly taken from them.
Tax Increment Financing (TIF) District Subcommittee
- Shorten the timeframe for TIF districts from 23 years to 10-15 years.
- Tighten the definition of “blighted” to incorporate objective standards rather than an open interpretation of the “but for” requirement.
- Increase transparency around the TIF district’s impact on the property tax collection process in other taxing bodies.
Following the release of the draft report, House Republicans voiced concerns that some of their ideas were not included. In response, Representative Sam Yingling (D-Round Lake Beach) indicated further changes will be permitted before the final report is released.
In particular, Republicans are seeking pension changes affecting future employees, further relief for school districts from state mandates, more property tax relief for seniors and a greater focus on government consolidation.
ISACo will continue to review the work of the Task Force and remain prepared, if necessary, to weigh in on legislation seeking to change the property tax system.
There is a dedicated page on ISACo's website with information about the Property Tax Relief Task Force (
available via this link