Property tax cap extended

The news: With the passage of Senate Bill 101, Illinois lawmakers extended the Alternative General Homestead Extension–”known as the “7 percent property tax cap.” Behind the news: In its original form, the bill extended the property tax cap initiated in 2003 to control skyrocketing property tax growth for those rapidly inflating in value. But Illinois House members revised the bill by including provisions that will phase out the tax cap in the city of Chicago by 2009, in north suburban Cook County by 2010, and in south suburban Cook County by 2011. Supporters of the House revisions believe that the cap won’t be necessary as the housing market stabilizes. “We believe that the legislation passed by the House is an appropriately structured phase-out of the legislation as the inflation that’s occurring in the residential market [subsides],” said Tom Johnson of the Taxpayers’ Federation of Illinois.

Wait ’til next year for reform

The news: House Bill 750–”which would shift some of the school funding burden from property taxes by increasing income taxes and expanding the state’s sales taxes while reducing local property taxes–”has stalled in the General Assembly. Behind the news: During the 2005-2006 school year, the state’s share of school funding declined for the fourth year in a row and stood at its lowest point in a decade, according to a Chicago Reporter analysis. Some argue that the state’s reliance on property taxes hurts property-poor districts that can’t generate sufficient local revenue and can’t attract the necessary residential or commercial development because of high property tax rates. Some blame Gov. Rod Blagojevich for the standstill because he refuses to sign any legislation that raises taxes. “If the governor would back off of this veto, we would pass this with bipartisan support,” said Ralph Martire, executive director of the Center for Tax and Budget Accountability and an author of the bill.