There's an old joke lager lovers tell about how you can't buy beer, you can only rent it.
Some homeowners and business owners in Chicago and environs undoubtedly feel the same way about the property that allegedly belongs to them.
With property tax rates in some areas topping 15 percent – on lots and buildings that are often overvalued – annual tax bills can easily exceed monthly mortgage payments and make ostensible owners feel more like renters.
“Some rates honestly have already reached what is effectively nothing less than confiscation,” writes Mark Glennon of Wirepoints.com in a post titled “Economic Suicide.”
“You have to wonder when taxpayers in many of these places will start grabbing their pitchforks,” Glennon comments, citing figures in a recently released study from the Civic Federation. “Residential rates of three percent and commercial rates of six percent are becoming common, and some are over double that.”
Glennon is alarmed, as all Illinois residents should be, not only at the excessiveness of the rates, but also “at the pace at which they are increasing.” In some areas, rates have more than doubled in a decade.
Jack Benny must be spinning in his grave, with rates in his hometown of Waukegan having risen by 169 percent over a ten-year period!
“This is madness. You might as well just confiscate property there and get it over with,” Glennon concludes. “This is a death spiral if there ever was one.”
A death spiral is exactly what it is. The more rates go up, the more homeowners and business owners feel compelled to relocate to less confiscatory communities. The more departures, the less revenue. The less revenue, the more taxing authorities are tempted to raise rates still higher, thereby encouraging further flight.
The obvious solution – the one public officials almost never think of – is to cut their bloated budgets, set low fixed rates for property taxes, and stop trying to bleed their constituents dry.