Our View: Taxing times will continue unless system changes

Tax and fiscal policy in Illinois is a mess.  Anyone want to dispute that? 

The great debate in Springfield during this legislative session is whether to make the “temporary” income tax permanent.  There’s no doubt lawmakers will do just that despite all the harrumphing you hear.  On Wednesday, the House approved a budget that depends on the $8 billion a 5 percent individual income tax rate brings in.  It seems a mere formality for them to OK the rate that makes such a budget possible. 

Gov. Pat Quinn has said that making the tax increase permanent is the only way to “balance the budget, properly invest in education and increase property tax relief in Illinois.” 

Maybe.  However, no matter what the budget, it’s a band-aid on a wound that will not truly heal unless the state implements comprehensive tax reform. 

Quinn’s Republican challenger, Bruce Rauner, has said that a complete overhaul of the tax code is needed.  We agree, but we’d like to see what Rauner’s overhaul would look like.  We know what he doesn’t like — a 5 percent individual income tax rate, corporate giveaways, high property taxes, etc. —  but what would he like to see instead? 

The campaign for governor is far enough along that it should move beyond name-calling and advance to specific ideas on how to make Illinois a better place to work, live and play.  For better or worse, we know what Quinn’s budget looks like.  What would Rauner’s look like?  How would it address all the state’s negatives? 

— Worst unfunded pension liability. 

— Worst credit ratings. 

— Third-worst unemployment rate. 

— History of being behind on paying its bills. 

And we haven’t even mentioned property taxes.  Northern Illinois property taxes are not just some of the highest in the state — they’re among the highest in the nation. 

Property values around here are dropping faster than the Chicago Cubs’ chances of winning a World Series this year.  In Winnebago County, equalized assessed value has fallen $1 billion from 2010 to 2014 and is projected to decline an additional $500 million by 2017 unless the current trend stops. 

How do you fix that?  A home is the biggest investment a person will make in his or her lifetime.  Property taxes and values are so out of whack around here that people cannot afford to live in the homes in which they raised their children.  Sell?  People are lucky to get what they originally paid let alone any return on their investment. 

Page 2 of 2 - Quinn has proposed property tax relief that we feel is inadequate, but we haven’t seen a better plan from Rauner. 

Half of Illinoisans say they’d move to another state if they could, according to a Gallup poll.  We’d bet many of them would rather stay if they didn’t pay more in property taxes than they did on principal and interest on their mortgage. 

One of the reasons your property taxes are so high is because Illinois does such a poor job of giving money to schools, which account for more than half of your property tax bill.  The state is last in the nation when it comes to state dollars spent on public schools.  Your property tax dollars fill the holes state money should. 

Your property tax dollars also fill the void created when the state shortchanges municipalities on their share of income tax revenue.  Municipalities used to receive 10 percent of state income tax revenues.  That was cut to 6 percent in 2011 when the current tax rate was approved. 

Restoring that percentage would help municipalities maintain services, meet their pension obligations and take the pressure off of property owners. 

So how do you adequately finance schools, ensure that social services get what they need and pay the bills?  If the answers were easy, Illinois wouldn’t be in the mess it’s in.