A freeze on local property taxes: That's one of the items Gov. Bruce Rauner and Republicans are calling for before he agrees to a budget deal with Democrats. The measure would include the provision that they can be raised any time, but only through a public referendum. Also, the freeze would include union changes, with an end to the so-called prevailing wage – where local governments are forced to pay union scale for all contract work. Supporters of this say getting rid of it would lead to more competitive bidding for construction work and millions in savings. And it would include the option for local governments to limit collective bargaining with public employee unions.
“It’s about putting that control back in the hands of voters who, at this point at time, feel like they have no recourse whatsoever. The government is out of control, expenses keep going up,” said Republican Senate Minority Leader Christine Radogno.
The bill that contains these measures, SB1046, was defeated in a Senate committee last week. Democrats oppose the measure, although they acknowledge that property taxes in this state are high. That’s because Illinois is last in the amount of money that funds education out of state coffers – putting the burden of funding education onto local taxpayers. That leads to the dramatic inequities in education funding you see in rich versus poor communities.
Democrats say this has to be a part of the property tax discussion.
“We agree with the governor. We’d not only want to freeze them, but reduce them,” said State Sen. Don Harmon (D-Oak Park). “But we’ve created this upside down system where we rely so heavily on property taxes to fund schools because the state has abdicated its responsibility to fund education. That’s what we need to do. Happy to engage the governor in a debate on education funding reform that would lead to property tax reductions.”
The call for a property tax freeze comes at a time when there is general consensus Chicago can’t even begin to address its massive pension debt without forthcoming property tax increases. In the next several years, Chicago will have to find new revenue in the billions to start to get its dangerously underfunded pensions back on to sound footing. Credit agencies have made it clear that new revenue will have to be part of the mix to get the rating out of the dumpster. And even the Republican leader acknowledged today that any talk of freezing local property taxes might have to exclude Chicago.
“Residential property taxes in Chicago are way below what the rest of the state pays,“ Radogno said. “I think they’ll have to go up to what other residents of the state pays. That might be part of a compromise proposal.”
Also late Tuesday, Democratic senators introduced their own version of a turnaround package, which included college tuition tax credits and minimum wage hike.
There is a middle ground on this portion of the governor’s agenda – Republicans are willing to give on some of the labor provisions, Democrats are willing to negotiate if education funding is tied to property tax relief. But of course, this is only if cooler heads prevail.