Analysis, Commentary, Opinion

On Property Taxes: Complaints or Solutions? Which Will It Be?

By John A. Ostenburg

ENEWSPF – A recent eNewsPF article raised concerns about how high property taxes in Park Forest likely will be for next year. It was a well-written and carefully documented article but seems to me to have a bit of the “hair-on-fire” element to it.

After all, is there really anyone in Chicago’s South Suburbs who doesn’t already know that our region suffers from property taxes more greatly than anywhere else in Chicagoland? Or who doesn’t recognize that, given the current course of things, the problem is going to get a whole lot worse before it ever gets better?

What the article didn’t address is the reality that property tax problems in the South Suburbs, and in other Cook County regions of overall higher poverty, are endemic to our current system of taxation, especially as regards two factors:

  1. Illinois remains one of a handful of states that continues to rely on property taxes to fund public schools; and
  2. The current Cook County property tax system rewards areas that are commercially sound while penalizing those areas that are not.

So, scream all you want about high property taxes in Park Forest and elsewhere in the South Suburbs, but none of that screaming will mean a darn thing. Screams will not correct the problem; only changes will!

South Suburban Leaders Called for School Funding Reform

To their credit, South Suburban leaders have been at the forefront of previous efforts to change the school funding system in Illinois. Unfortunately, their work has not yet been successful. But now is not the time to slack off. Truth be told, a more progressive governor and state legislature, as we currently have in Illinois, means progress on this front is more likely. Granted, taxpayers only recently rejected a statewide referendum to increase the income tax for that purpose, but that doesn’t mean we should retreat like whipped puppies. Real change comes only from the continuing effort: drip, drip, drip, and soon we cut a crevice through the mountain!

Change the Way We Fund Schools

Changing the way we fund schools means that school funding, statewide, will be more equitable, with all districts benefiting from the state’s largesse. Right now, wealthy regions have excellent schools, while more moderate-income regions have average schools, and poorer regions have schools in great need. Changing the system doesn’t mean anyone should suffer, but only that everyone should benefit.

Taking the burden of school funding off of the local property tax bill is a plus for everyone. Take a look at your tax bill. See where the bulk of what you’re paying goes? It’s to fund schools. Not to repair roads, or to fund police and fire protection, or to provide for parks and recreation facilities, or to assure working water and sewer services. Change the school funding system and you have property tax reform.

Some will ask, why? Isn’t it a case of paying taxes either way? Well, the answer to that question is both a “yes” and a “no.” “Yes,” taxpayers will pay either way, but by paying from the income tax, it means paying from your ability to pay; that’s not the case with the regressive property tax, especially when assessments are really high even if your income level has decreased. So, “no,” it’s not the same!

Cook County’s Tax Rate for Commercial and Industrial Property

The second problem spot comes in Cook County’s unique system of assigning a tax rate to commercial and industrial property that is roughly twice what it is for homeowners.

I’ve been told – not sure if it’s true or apocryphal – that the policy developed because so many residents of the collar counties travel into Cook County for employment and thus create high demand on the Cook County infrastructure; yet, because of where they reside and pay property taxes, they contribute nothing toward meeting those Cook County costs. To correct this wrong, leaders long ago gave Cook County the unique right to charge a higher rate on the businesses that employ those workers. In every other county in the state, the same rate applies to commercial industrial property as to residential property.

Okay, so that’s not a bad concept and relieves many Cook County residents of bearing a heavy property tax bill because businesses in their areas are picking up a bigger portion of the costs. But what about areas that don’t have so much commercial and industrial property? What about the South Suburbs, for example? Guess who pays a disproportional amount of the property taxes? If you said, “Residents,” bingo! You win the stuffed donkey!

Furthermore, because of the two-tiered system, the few businesses who are in the region are paying a dollar amount far in excess of what similar businesses are paying in areas with high commercial and industrial sites. And, as far as attracting new businesses to areas such as the South Suburbs with a tax structure such as what exists now? As Tony Soprano and friends might say, “Fuhgeddaboudit!”

South Suburban Homeowners Are Penalized

So under the current system, Cook County regions with high business activity pay a dividend to both the businesses and the homeowners, but homeowners in the South Suburbs and similar regions lacking in high business activity are penalized with high property taxes and the inability to attract the needed new business to offset the problem. And that, folks, is how the rich get richer and people with low incomes do worse.

Over the course of my almost 30 years as an elected official I argued constantly about how unfair the tax system is to our region, but – frankly – I’ve felt like a voice crying in the wilderness. The people who have the power to change things like the system as it is and are doing nothing to make corrections.

My long-time suggestion has been to take the four townships in Cook County that suffer most greatly from high property taxes and the lack of commercial development – Bloom, Bremen, Rich, and Thornton – and create a special taxing district where the property tax rates are more in balance. With a lower rate for commercial and industrial, business development will begin to flourish in our region as it does elsewhere. Then, as the lower tax rate for business begins to produce more income, lower the rate for homeowners so they see the relief they so desperately need.

Regional Property Tax Relief from the State

In the interim, before that balance is achieved, the State of Illinois needs to provide regional property tax relief to keep our residents from being driven out of their homes. That relief should be viewed as similar to the type of assistance that is provided after regions are hit with natural disasters such as tornadoes or flooding, etc. After all, high property taxes have just as devastating an effect as do those other disasters. I know legislators and other state leaders will ask, “Where will we get the money?” My answer is, “Same place where you get funds for other disasters,” because what’s currently happening with property taxes in the South Suburbs is a disaster!

For every problem, there is a solution. However, there are not always people willing to bring those solutions into being. During my time in elected office, I saw many very dedicated officials who always had the public’s interest in the forefront of their minds. Sadly, however, I also saw far too many who were more interested in looking out for self-interests than in addressing the problems of others. We need to elect more of the former and fewer of the latter.

John A. Ostenburg was mayor of Park Forest from 1999 to 2019. He previously served two years in the Illinois House of Representatives and seven years as a Park Forest Trustee.