Analyst: Illinois’ high property tax rates burden home owners, businesses

(The Center Square) – Compared to other states, Illinois’ property taxes continue to be among the highest.

The personal finance site Money Geek gave Illinois the grade of “F” because it ranks second in the nation behind New Jersey for the highest property taxes.

When it comes to the consequences of its tax policy, Josh Bandoch of the Illinois Policy Institute would give Illinois an even lower grade, he said.

“An ‘F’ is too high. Except for New Jersey, Illinois ranks at the rock bottom when it comes to tax friendliness,” Bandoch said.

With property taxes at over 2% of the average household income, Illinoisans struggle with a huge tax burden, Bandoch said.

“Compare that to Florida, where the taxes are 0.91%,” he said.

Bandoch blames high property taxes and high commercial property taxes for pushing businesses and people to leave Illinois, he said.

Ninety-seven percent of the people who moved out of Illinois in the past year relocated to states with lower tax rates, Bandoch said.

“Every six minutes and 15 seconds, an Illinois mom, dad, colleague or friend moves out of Illinois to a more tax-friendly state,” he said.

The Money Geek survey found that a typical middle-class family in Illinois pays $9,524 more a year in taxes than a typical family in Nevada, the lowest-tax state, pays.

High property taxes contribute to the housing burden that Illinoisans struggle with, Bandoch said.

“Nearly one-third of Illinois households are considered ‘housing burdened’ because they pay at least 30% of their income on housing,” he said. “There is a clear connection there as to why families and businesses are leaving Illinois. It is unsustainable.”

High commercial property taxes, particularly in Chicago, are an undue burden on businesses, Bandoch said.

“Even United Airlines is rumored to be moving some of its offices out to Denver. That would be a huge loss,” he said.

More people and businesses generate more revenue and jobs, Bandoch said.

“Even if an individual pays less taxes, there is more revenue coming into the state,” he said.

If Illinois could move from ranking second in the nation for high property taxes to 25th or 26th, that would be a massive improvement, Bandoch said.

“Illinois doesn’t have to be Florida or Arizona or Nevada. Illinois just has to be smack in the middle. That would make a huge difference,” he said.