Illinois’ high property taxes hurt the economy, particularly in communities already struggling. When government overtaxes, residents and businesses flee – leaving those remaining with a bigger tax bill.
At an effective rate of 1.83% statewide in 2023, Illinois families are being punished by the nation’s highest property tax rate, but hidden in the average are some cities where the burden is crushing.
Lake County’s effective property tax rate is 2.68%, but the average hides a huge disparity between communities in the far northeastern Illinois county.
Lake Forest has a median home value of $909,800 and an effective property tax rate of 1.94%. The result is a median annual tax bill of $17,650.
Zion has a median home value of $179,100 and a tax rate of a 4.03%. The median tax bill is $6,040.
Lake County isn’t the only place where this happens. St. Clair County in southwestern Illinois near St. Louis has an effective tax rate of 2.09%. The disparities between rich and poor cities are big.
East St. Louis’ median home value is $52,700 and residents face a 4.61% effective property tax rate. The median annual bill is $1,162.
Shiloh’s median home is around five times as valuable at $263,300 and the tax rate is 2.23%. Residents paying a median annual tax bill of $5,089.
When structured well and kept at an affordable level, property taxes are among the fairest taxes – better than personal income, corporate income or general sales taxes. However, Illinois shows what happens when property taxes are too high and hit poorer communities too hard.
As property taxes become unaffordable, businesses decide to leave, leading to higher unemployment rates as people lose their jobs and move away. As residential and commercial properties become increasingly vacant in these zones, the remaining residents must bear a higher tax burden to meet the demands of local governments and school districts.
The cycle depletes these taxing zones and eventually leads to opportunity deserts. Fewer opportunities, fewer people, more tax burden.
Combine these high tax rates with Illinois’s predatory practice of home equity theft when taxes are not paid, and you are left with fearful residents.
From 2014 to 2021, over 300 homes were taken from Lake and St. Clair county families because they couldn’t keep up with property taxes. They lost a combined $32 million in equity in the tax lien sales.
Many of these losses were the result of debt less than the price of a 10-year-old Chevy Impala. Despite a recent Supreme Court ruling deeming the practice unconstitutional, Illinois has yet to pass a law ending the practice.
What happens in cities such as East St. Louis and Zion doesn’t stay there. As more Illinois communities spiral into decline because of rising tax burdens, the state bears the growing costs of welfare, public safety and government services as it loses revenue. That forces the remaining Illinois taxpayers to absorb higher state taxes and a quickly growing budget.
Hardworking Illinoisans being squeezed out of their homes and communities being hollowed out is a warning sign the state’s economic foundation is crumbling. State leaders must control high costs such as pensions that continue to drive property taxes ever higher and should seriously consider measures to offer relief before even more of Illinois becomes an opportunity desert.
