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P R A C T I C E   L I M I T E D   T O   T H E   T A X A T I O N   O F   C O M M E R C I A L ,  I N D U S T R I A L  &  I N V E S T M E N T – G R A D E   R E A L   E S T A T E            

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2020 Cook County Tax Multiplier

The Illinois Department Revenue has announced that the 2020 Cook County Tax Multiplier will be set at 3.2234 an increase of 10.5% over the 2019 Tax Multiplier of 2.9160.

The Tax Advantages of Indiana

By Morton Marcus

Facts and Figures, How does your state compare? is an annual publication of the Tax Foundation. It is mailed to every state legislator and governor.

Many Hoosier legislators and administrators quote the Foundation’s State Business Tax Climate Index. As of July 1, 2020, Indiana ranked #9 among the 50 states. That places us in the top quintile of favorable states. Such eminence! We’re up there with Wyoming (#1), South Dakota (#2), and Alaska (#3).

How do we get to be #9? For that Index, we rank #13 in Corporate Income tax, #15 in Individual Income tax, #20 in Sales tax, and #27 in Unemployment Insurance tax. There must be something that propels us up to #9. Turns out we are #2 in Property taxes on business and that offsets all those other taxes.

In the early 1970s, Indiana got about a third of its state and local tax revenues from property taxes. Today, about a quarter of our tax collections come from property taxes.

On a per capita basis, including every infant, our property taxes are $1,033 and we rank 39th behind the highest state, New Jersey ($3,378 per capita), with Alabama 50th at $598 per capita.

Alternatively, Indiana ranks 30th with property tax paid at 0.81% of owner-occupied housing value. By this measure, Alabama is lowest (at 0.37%) among the 48 continental states, while New Jersey is again in first place at 2.13% of value.

While Indiana is low on property taxes, we make it up on sales taxes. Our 7% statewide sales tax rate is the highest in the nation (tied with MS, RI, and TN). Unlike most states, we don’t permit local sales taxes or have a statewide sales tax earmarked for local governments.

Indiana has the lowest statewide flat tax (3.23%) on individual income. Most states have graduated income tax rates as incomes rise, in addition to local income taxes. Indiana’s state income tax raises $900 per capita, the 10th lowest amount in the nation among the 43 states with income taxes.

Our gasoline tax rate at 42.16 cents per gallon is the 10th highest in the nation, lower by 10 cents from Illinois, but higher than neighboring Kentucky, Michigan, and Ohio.

Indiana’s gasoline taxes and license fees pay for 68.7 percent of our state and local road spending, the highest level in the nation. As crossroads of the nation, with heavy truck traffic, we might ask, “Do we get our fair share of federal highway funds?”

Before any action by the current Indiana Legislature, we had the 13th lowest cigarette tax rate. No vaping or marijuana tax. The seventh lowest tax on spirits, the 15th lowest tax on wine, and the eighth lowest tax on beer.

Thus, Indiana’s low taxes are favorable for both business and unhealthy choices.

Morton Marcus is an economist. Reach him at mortonjmarcus@yahoo.com. Follow his views and those of John Guy on Who gets what? wherever podcasts are available or at mortonjohn.libsyn.com

Cook County Forest Preserve Property Tax Increase Referendum

Cook County voters would be asked to weigh in on whether to raise property taxes as a way to stabilize the Forest Preserves’ finances during the November 2022 general election under a proposed referendum that all commissioners in charge of the district indicated they want on the ballot.

All 17 commissioners have signed on as co-sponsors of the potential referendum, which was sent to a committee this week for further consideration. Although their support doesn’t necessarily amount to a tax hike endorsement, the move paves the way for the voters to say “yes” or “no” next year to property owners opening their wallets to help maintain the 70,000 acres of green lands, trails and water that officials say are in dire need of more cash.

Kristin Pink and Becky Collings, ecologists with the Forest Preserves of Cook County, visit restoration sites at Palos Preserves near Palos Park on Sept. 10, 2020.
Kristin Pink and Becky Collings, ecologists with the Forest Preserves of Cook County, visit restoration sites at Palos Preserves near Palos Park on Sept. 10, 2020. (Zbigniew Bzdak / Chicago Tribune)

The chief sponsor, Commissioner Larry Suffredin, said he thinks the time is now to raise taxes because the district’s fiscal situation is in “a precarious state,” with the possibility of selling off land to stay afloat looming in the future. Suffredin has announced he’s not planning to seek another term when his current one expires.

“It’s such a small amount, but the responsibility we have for the 70,000 acres and putting together positive use of the land costs more than we can currently do,” Suffredin, an Evanston Democrat, said in a phone interview. “People see that there’s not a lot of places to waste money and that these programs that they can do are such that they really do improve the quality of life.”

The referendum calls for a 0.025% increase to a total of 0.076% in property taxes, which amounts to hiking up the average Chicago homeowner’s bill by about $1.50 a month, or less than $20. That would shore up $41,729,404 for the Forest Preserves, which only kept its structural deficit steady this year thanks to rainy day funds.

Cook County Board President Toni Preckwinkle, who is also president of the Forest Preserves Board, said Wednesday she would personally vote for the tax hike if it appears on the ballot next year.

“I believe for a long time that the Forest Preserve needs resources to continue to provide the programming and do the restoration work that’s desperately needed, so there’s clearly a need for additional resources,” Preckwinkle said.

After the resolution clears the Forest Preserve board’s finance committee, it will go to a full floor vote sometime next month before another round of votes in December that would finalize the language, Suffredin said. He said the money should be used to acquire and restore land, improve programming for the community, address the backlog of maintenance needs, support the Brookfield Zoo and Chicago Botanic Garden and, perhaps most importantly, help close the funding gap for the district’s pension shortfall.

The $134 million Forest Preserves district budget is limited in funds because as a non-home rule unit of government, it does not have a sales tax levy, so more than 80% of its operating budget is supported by property taxes. Much of the rest comes from fees such as campground permits, but such nontax revenue dipped during the coronavirus pandemic’s restrictions.

A dusting of snow covers the woods at Bunker Hill Forest Preserve on Chicago's Northwest Side on Jan. 23, 2018.
A dusting of snow covers the woods at Bunker Hill Forest Preserve on Chicago’s Northwest Side on Jan. 23, 2018. (Nancy Stone / Chicago Tribune)

That led to Preckwinkle passing a 2021 budget that withdrew more than 40% of a $43.9 million corporate reserve fund. In October, she cast a grim outlook for the district’s long-term fiscal future and said her budget proposal will not “address the bigger issues” in Forest Preserves.

However, both Preckwinkle and many commissioners did not throw their support behind a property tax hike referendum for the November 2020 election, despite Suffredin’s urging. He and Preckwinkle said that was due to Gov. J.B. Pritzker’s own plan for a graduated income tax, which ultimately failed, taking precedence on a ballot that Democrats did not want to crowd with another question related to levies.

“I don’t know that it was a change of heart as much as it was trying to understand the political strategy that the governor was promoting,” Suffredin said, adding that this time, “I don’t expect that we will have a problem.”

WPTA Webinar

Join the Women’s Property Tax Association for the Do’s and Don’ts of Practice Before the Property Tax Appeal Board Revisited
June 18, 2021Noon

 

To register, click here.

The Women’s Property Tax Association is pleased to announce that Deputy Chief Administrative Law Judge Katherine Patti and Administrative Law Judge Jennifer Vesely have agreed to revisit the first topic ever presented five years ago by the WPTA: the Do’s and Don’ts of Practice before the Property Tax Appeal Board. Join us to learn about he practical administration and litigation of PTAB cases. 

The WPTA will be seeking approval to issue MCLE credit for licensed attorneys.

The Women’s Property Tax Association is comprised of women professionally engaged in property tax law, property tax valuation and/or assessment administration or adjudication.

 

Property Tax Refunds

The Illinois General Assembly has passed Senate Bill.  SB 508 creates a new Section 18-233 in the Property Tax Code amending the Property Tax Extension Limitation Law (PTELL) to allow taxing districts to increase their extensions in an amount equal to the refunds from assessment reductions granted in the prior 12-month period. The bill now goes to the governor for his signature.

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