Soaring property taxes are shaping up as a key issue in the March primary elections, with candidates trading blame as the pressure mounts. But few are confronting the deeper, historic flaws in Illinois’ property tax system — a system that, frankly, no one would design if we were starting from scratch today.
Illinois’ property tax system is failing the very people it’s supposed to serve. For decades, lawmakers have layered fixes on top of fixes, creating a system so complex and inequitable that it now threatens the financial stability of entire communities. What was once intended to be a predictable, locally controlled revenue source has become a regressive burden that pushes families to the brink, hollows out struggling towns, and erodes public trust. The reality is that the problems are the fault not of one single actor, but decades of neglect and confusion.
There are several interconnected problems with the current Illinois property tax system that have dramatically increased tax burdens on homeowners and businesses.
Primarily, there are problems of tax burden — the fact that Illinois relies so heavily on property taxes to fund local government which has exponentially increased property taxes over time and tax distribution — or who actually pays property taxes.
Property taxes are based on property values, not income. When assessments spike — as they often do — tax bills can rise even if a homeowner’s income does not. This is especially punishing for working-class families and seniors on fixed incomes. Rising assessments represent unrealized gains; homeowners don’t benefit unless they sell, yet they are often asked to pay more year after year.
A major factor driving rising tax burdens on homeowners and businesses is the steady year-over-year increase in local government property tax levies. Illinois relies on property taxes far more than other states, especially for school funding. While the national average shows states and localities contributing roughly equal shares to education, Illinois leans heavily on local property taxpayers — roughly 50% of school funding came from local sources in 2023. This overreliance deepens inequities and fuels resentment.
Several of Illinois’ nearly 9,000 local governments, such as Chicago Public Schools and suburban school districts, have raised their extensions to the maximum allowed between 2021 and 2024. CPS alone increased its extension in that period by $406.9 million, or 11.9%, and the district now projects collecting $4 billion in property tax revenue for FY2025.
The consequences of overreliance on property taxes plus increasing levies are stark. Illinois now has the highest effective property tax rate, which is the percentage of a property’s full market value paid annually in property taxes, in the country at 1.83%, according to the Tax Foundation. In some south suburban Cook County communities — Ford Heights, Phoenix, Riverdale, Harvey — total rates exceed 20%. These punishing rates don’t reflect lavish public services; rather, they reflect a collapsing tax base and decades of economic decline.
They are a sign of distress, not prosperity.
Predictably, property tax collection rates are falling. The collection rate for all Cook County taxing bodies has dropped for three straight years, with nearly $1 billion in taxes going unpaid in 2023. In Ford Heights, just 31.4% of taxes were collected. When taxes become unaffordable, people stop paying. When people stop paying, rates rise even further on those who can. It is a downward spiral.
Attempts to rein in taxes — such as the “tax cap” or Property Tax Extension Limitation Law (PTELL) — have not lived up to their promise. Exemptions, loopholes and carve-outs allow levies to grow faster than advertised.
Meanwhile, Cook County’s assessment and appeals systems face ongoing questions about accuracy, fairness and transparency. Hundreds of thousands of appeals each year reflect a lack of confidence in the system itself. Illinois has built one of the most administratively complex property tax systems in the nation. Local governments levy taxes, assessors value property, multiple appeals bodies issue rulings, clerks calculate rates, treasurers prepare bills and the Illinois Department of Revenue oversees uniformity. This fragmented process fuels political fighting, causes costly delays, and makes it nearly impossible for the average taxpayer to understand who is responsible for what.
Illinois needs a comprehensive restructuring of its dysfunctional property tax system, not more piecemeal patches. This will require a concerted effort by all stakeholders, including the governor, the General Assembly, local government officials, business leaders and community advocates. A better property tax system is possible, but only if lawmakers are willing to upend decades-old political compromises and patchwork solutions to develop a fairer, simpler, more transparent system.
Until then, state legislators in the spring session should not add to the burden of local governments and taxpayers through unfunded mandates amounting to stealth property tax increases, most notably with employee pension sweeteners.
Joe Ferguson is president of the Civic Federation.
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