Reprint from WHITT Law Firm LLC. Written By: Brittany Flaherty Theis Submitted by Anthony Travis, The Tax Doctor
The Property Tax Relief Task Force has released its draft report to the Governor and General Assembly. In its report, the Property Tax Relief Task Force provides an introduction to property taxes generally, as well as a primer on the property tax cycle in Illinois. The report then describes the Property Tax Relief Task Force’s concerns and recommendations for each stage of the property tax cycle – levy, assessment, extension, and collection.
Enabling Legislation and the Property Tax Relief Task Force
Public Act 101-0181 (the “Act”), adopted August 2, 2019, amends the Property Tax Code by adding Section 24-36, which creates the Property Tax Relief Task Force. The Property Tax Relief Task Force was created to: identify the causes of what the General Assembly deemed burdensome property taxes; review best practices in public policy to create short-term and long-term relief for homeowners; and make recommendations to assist in the development of changes needed to create that relief. The Act mandated that the work of the Property Tax Relief Tax Force was to be completed using a “racial and economic equity lens.”
The Act included provisions regarding the membership of the Property Tax Relief Task Force, its tasks, the support it was to receive, and a deadline of December 31, 2019 for its final report. Ultimately, the Property Tax Relief Task Force was comprised of 88 members, all but two of whom were State legislators. Seven subcommittees were formed. An interesting, although not surprising, approach taken within the Report is for each subcommittee to make recommendations. The recommendations, therefore, are not necessarily representative of the positions of all the subcommittees or the Property Tax Relief Task Force as a whole.
The subcommittees included:
- Assessments and Exemptions Subcommittee;
- Government Consolidation Subcommittee;
- Social and Economic Disparities Subcommittee;
- Local Pensions Subcommittee;
- PTELL and Local Governments’ Tax Levy Subcommittee;
- School Funding and School Property Taxes Subcommittee; and
- TIF Districts Subcommittee.
The Property Tax Relief Task Force has released its draft report pursuant to the Act (the “Report”), which is available here. The Report contains the Property Tax Relief Task Force’s recommendations for reducing property taxes in Illinois. Its recommendations are divided into categories based upon the relevant stage in the property tax cycle. Just a few of the concerns and recommendations are described below.
- “Attacking Levies”
- The Report highlights the large number of units of local government in Illinois, but acknowledges that it is not easy to create or eliminate a unit of local government. The Report discusses inherent complications with merging units of government, but also describes administrative efficiencies that can result from consolidation or merger.
- Special attention is given in the Report to school districts. “One area of especially great opportunity for consolidation is school districts.” The Report continued, however, by acknowledging that despite several potential benefits of consolidation for some districts, more information would be needed before specific recommendations could be made. Additional recommendations regarding school districts involved (1) districts petitioning for increased state funding; mandating cash reserve restrictions; and placing requirements on the Illinois State Board of Education to provide best practices for debt and reserve ratios, as well as long-term planning goals. Two subcommittees made separate recommendations to shift (or remove) the burden of funding education to the State instead of local school districts. An additional recommendation regarding school districts would mandate 25% of all newly-created TIFs to be set aside for school districts to help protect them from the full costs of TIFs.
- “Attacking Assessments”
- Recommendations in the “Attacking Assessments” section primarily targeted income-producing properties, with a few additional comments regarding property tax exemptions. To “increase fairness and accuracy” in the property tax system, the Report recommends assessors be provided with more information in a timely manner. It is recommended that all building owners be required to submit income and expense data each year.
- An additional recommendation within this category included sharing industrial and commercial assessed value across a county for school funding.
- Criticisms of the alleged inaccuracy of assessments and recommendations to speed up the appeal process were the focus of the “Appeals” section.
- The Report also included a section dedicated entirely to TIFs to cover the recommendations made by the TIF District Subcommittee, which recommended that the timeframe for TIF districts be shortened from 23 years to 10-15 years; the definition of “blighted” be tightened; and transparency regarding the impact of the TIF on property taxes be increased.
Additional categories for recommendations included “Attacking Rates” and “Attacking “Bills.” The Report represents a collaborative effort to discuss the property tax system in Illinois and the impact that system has on various constituency groups and the State as a whole. While the Report does not contain a specific blueprint for action, it vocalizes many of the considerations (albeit sometimes inconsistently) any proposed legislation would need to address.
The attorneys at Whitt Law have decades of experience addressing property tax matters for units of local government. This work often includes intergovernmental cooperation, representation before local boards of review and the Illinois Property Tax Appeal Board, guidance regarding the Property Tax Code and School Code requirements for the levy and extension process, and advocacy and counseling related to legislative matters, TIF districts, and consolidation. Please contact Whitt Law Managing Partner Stuart Whitt with questions regarding Whitt Law’s past work on State task forces, legislative matters, and consolidation. Please contact Whitt Law Senior Attorney Brittany Flaherty Theis with questions regarding the Report, assessment complaints or appeals, levies, extensions, and TIF districts.