"The Reeder Report
Commentary By Scott Reeder | Journalist in Residence, Illinois Policy Institute
sreeder@illinoispolicy.org
A Wrinkle in the Taxes
Politicians love to pander. And no one gets pandered to more than old folks.A good case in point is what Gov. Pat Quinn did this week. He signed Senate Bill 1894, which raises the senior homestead exemption from $4,000 to $5,000. Quinn claims this will save seniors as much as $200 on their property taxes. The reality is that for most seniors it will save about $60.
It’s important to remember that cities levy an amount rather than a rate. So when a tax break is given to one group, it is made up by the rest of us.
For example, let’s say Moline levies $11.6 million in property taxes. But the state gives expanded tax breaks to Moline senior citizens. That means the rate paid by all of the taxpayers younger than 65 goes up. So it’s not really a “tax break.” It’s better described as a shifting of taxes from one age group to another.
Is that good public policy?
Please keep in mind, home-owning seniors are one of the wealthiest groups in American society. The reason is simple: they often have reached a point where their homes are paid for, their retirement savings are secure and their personal expenses are at their lowest.
And yet, this is a group the governor and the Illinois General Assembly have chosen to pander to, perhaps because of their high rate of voter participation.
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Illinois vs. Missouri
Do folks in the Show-Me State have a greater love of taxes than in the Land of Lincoln?Voters in both states went to the polls a few days apart this spring and voted on a host of local tax referendums.
In Illinois, voters rejected 60 of the 106 tax referendums put on local ballots. On the other hand, in Missouri voters rejected 68 of 272 referendums. That’s a 57 percent rejection rate in Illinois to Missouri’s 25 percent rejection rate.
Why the difference?
Illinoisans are overtaxed, contends David From, Illinois director for Americans for Prosperity. “People have more of a tolerance of local taxes because people want their schools to be good. They also want to have good parks,” he said. “It more directly affects their lives so they should be more likely to support taxes. And, frankly, there is less organized opposition so it’s easier to pass taxes on a local level.“But in Illinois unemployment is high, the median household income has dropped and state income taxes went up 67 percent two years ago. People are just tapped out and still they are being asked to pay more. I think the result we see is people are just saying ‘enough is enough.’”"
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