When Government Has To Subsidize People's Property Taxes

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Wait, you might say. Aren't property taxes supposed to fund local government? Are you telling us that government now needs to find money to help pay a substantial slice of the property taxes that are meant to … well … fund the government? The irony couldn't be richer.

For the south and west suburbs, local governments approved $265 million more in property tax this year. Households are paying all of that increase and more, seeing their bills rise collectively by $400 million while commercial owners experienced a collective $122 million decline.

This frustrating zero-sum aspect of property taxes wouldn't make for such a crisis if the tax levies themselves weren't so high.

In recent weeks, Kaegi has said he's putting together proposed state legislation that would establish a "circuit breaker" for households with low and modest incomes. If their taxes rose above a certain level, the rest of what they owed would be covered by a fund, established by the state, Cook County, or both. The assessor says this approach isn't unusual; 29 states have some form of property tax circuit breaker. Until about a decade ago, Illinois provided one for low-income seniors. (The circuit breaker was distinct from and in addition to the senior exemptions, which still exist.)

The cost of subsidizing property tax bills in the south and west suburban region alone likely would be in the tens of millions, according to the assessor's office, which says it will have a better idea of the price tag next month after it completes an analysis of that question. Similar residential spikes occurred in the north and northwest suburbs last year. Kaegi's office is reassessing values in Chicago as we write, and there is trepidation around whether Chicago homeowners will see similar increases next year.

One can only imagine the cost for providing such relief throughout the Chicago region and even statewide. It's not as if property tax stress is confined to Cook County.