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Property tax rebates
Fri May 16, 2014
Civic Federation: Property Tax Rebates Inefficient
Taxes have been in the spotlight at the state Capitol this spring, most visibly the fate of the state's income tax rates. But another tax plan, floated by Governor Pat Quinn, is also attracting ire of Republicans and economists alike.
Governor Quinn's plan for the Illinois budget calls for extending the state's 5-percent income tax rate, instead of allowing it roll back.
It's coupled with a $500 property tax rebate for every homeowner in Illinois.
Abdon Pallasch, assistant budget director for the governor, says it's relief that will impact taxpayers more than any fluctuation in income tax rates.
"Illinois residents pay some of the highest property tax rates in the country," he said. "We have one of the lowest state income tax rates. So, where do people need relief? They need it for their property taxes."
But Laurence Msall, president of the Chicago-based Civic Federation, says the plan is inefficient.
"If your aim was to reduce property taxes, the best way to do that is for the state of Illinois, if it was going to make its temporary income tax increase permanent, to share the traditional 10 percent with the local government distribution fund," He said.
Translation: give cities and towns a bigger share of the state's income tax revenue so they can depend less on local property taxes.
Other critics say that Quinn's plan to give homeowners a rebate is unfair to renters and other who can't afford to buy real estate.
Taxing retirement income