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Property-tax relief package faces hurdles in General Assembly
By Ted Cox | Daily Herald Staff
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Published: 1/20/2010 12:02 AM

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A state task force assigned to study reforms in the property-tax system delivered a report with six specific recommendations Tuesday, but Senate President John Cullerton admitted prospects for a main proposal - to "rebalance" the state's property, sales and income taxes, in part by hiking the income tax - were "unlikely" to gain passage in an election year.

The Property Tax Reform & Relief Task Force was created in 2007 as part of the law phasing out the so-called 7 percent homeowner's exemption in Cook County. With state Sen. Terry Link, a Waukegan Democrat, as chairman, it was assigned to find ways to "reduce the reliance on property tax," Link said at a news conference at the Thompson Center in downtown Chicago.

After 20 months, the task force delivered a report with six recommendations: to "rebalance" the property, sales and income taxes, consolidate the state's almost 7,000 taxing bodies, widen a "circuit-breaker" program making allowances for those unable to pay their tax levies, in part through a voucher system, increase eligibility for a senior-citizen deferral program and review the increasing use of tax-increment-financing districts.

Link called them "six strong proposals" and said they had to be adopted "in totality" to be effective.

Yet the proposal to "rebalance" the property, sales and income taxes, because "Illinois relies too heavily on property tax to fund government services," Link said, figured to face tough going in the General Assembly.

Illinois "continues to have a relatively low income-tax rate compared to most other states," the report says. Yet Cullerton, a Chicago Democrat, called a hike in the income tax in an election year "unlikely" even with the support of Gov. Quinn, saying, "I think we're going to focus on creating jobs this year any way we can." He passed the buck to Republicans, saying such a move would require bipartisan support and "it's up to them."

Other proposals figured to gain more common-sense acceptance. J. Thomas Johnson, president of the Taxpayers' Federation of Illinois, pointed to the 6,994 distinct taxing bodies in Illinois - more than any other state - and said some property-tax bills are drawing for as many as eight to 10 government agencies. The report called on the General Assembly to encourage local governments to consolidate those agencies to improve government efficiency - or make those reforms itself.

"Looking at the consolidation of governments is something that we should do immediately in Springfield," Cullerton said.

Cook County Assessor James Houlihan cheered the "circuit-breaker" proposals.

"The issue and the problem with property taxes, particularly in difficult economic times, is that the amount of taxes we're asking individuals to pay does not relate to their ability to pay those taxes," he said, pointing to widespread layoffs and pay cuts. "There should be a circuit breaker that allows individuals to pay only a certain portion of their income in property taxes and a fund to make up those lost revenues in local government."

Like Chicago Mayor Richard Daley earlier in the day, Houlihan also pushed for reinstatement of the "7 percent solution," the Cook County homeowner's exemption, which has been opposed by House Speaker Michael Madigan.

"I remain steadfast," Houlihan said, "in suggesting the 7 percent is an appropriate amount of relief for homeowners and should be reinstated."

He said more than half of all Cook homeowners would face a $600 increase in their property taxes with the phaseout, and that 80 percent would pay more overall.

That, however, goes along with the task force's proposals before the General Assembly.

"The issue before us now is whether the legislature will have the will to make these changes," Houlihan said. "It is not good news for homeowners if there is no activity by the legislature."