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Thursday, June 1, 2017 12:17 am

Frozen assets

Rauner’s tax freeze is the wrong solution to the wrong problem

PHOTO BY ISTOCKPHOTO.COM

 

“Everyone in Illinois,” says Bruce Rauner, “knows that property taxes are too high” compared to other states. Everyone in Illinois knows nothing of the sort. Mr. Rauner, for example, knows only that most Illinoisans believe that property taxes are too high compared to the value of services delivered. Or that they are too high compared to their ability to pay. Or that they are too complicated and thinking about them makes their heads hurt. Most Illinoisans believe that angels are real, too. That’s why what “everyone knows” is seldom a trustworthy guide to policy.

As I write, it is unclear what kind of budget package, if any, might emerge from the Statehouse this spring. All that seems certain is that Rauner will insist on freezing local taxes on property in return for his approval to raise state taxes on incomes and sales. Rauner says he is taking this heroic stand on behalf of taxpayers so they will have “the ability to control whether . . . property taxes go up or down in the future.”

Do they not know they have that ability now, I wonder? Some do. According to the Illinois Association of School Boards, voters on school referenda in the March 15 Illinois general primary election last year did just that, approving 5 of 11 tax increase questions, 9 of 18 bond propositions and 6 of 9 county sales tax proposals. But taxpayers’ ability under present law to control whether property taxes go up or down avails them not if they don’t exercise it. Voters unhappy with local taxation could have just chucked the responsible mayors and city councils, village boards, commissioners and trustees and other amateur economists out of office in Illinois’ April 7 local elections this year, but four of every five voters did not even bother to cast ballots. If local government costs are out of control, it’s because taxpayers have fallen asleep at the wheel.

Rauner’s imagined prosperous Illinois – a youthful workforce freed from the shackles of union membership, that is able to read write, reason and calculate and (appealing to our Mr. Bounderbys) both expert and exploitable – depends utterly on good local schools paid for by property taxes. In the state’s more favored parts, folks pay lots of money in property taxes, and are usually happy to provide them, because those schools, with parks and libraries, sustain high house values by making their neighborhoods desirable places to live. As the above school referenda results showed, voters agree to raise them about as often as they don’t.

Ah, but in the real Illinois – mainly outside metro Chicago – property taxes often are higher than people are willing or able to pay. Police and fire pensions are a big part of that, as is the duplication of services by local governments and weak civic values. The real problem, however, is not that taxes are too high in such places but that incomes are too low, leaving people owning houses whose taxes and upkeep they can no longer afford. (In fact you can argue that the real problem is that too many Illinoisans own more property than they can afford.)

In the past, bad times in Illinois and the rest of the U.S. spurred people to leave for opportunities elsewhere. Upping stakes and heading for greener pastures is part of our national myth. People who have the skills needed in the flush part of the country still do move, but this generation’s Tom Joads do not. (The recent population losses are because fewer people have been moving into Illinois, not because so many more are leaving.) Why this is happening (or rather, not happening) has vexed our social scientists, but one big factor keeping people in Illinois is houses they can’t sell or, if they are sold, don’t earn enough for the owners to buy into markets in other states. Illinois is a drag on them, and they are a drag on Illinois.

Rauner’s tax policy is to create or aggravate a fiscal crisis (by, for example, freezing local property taxes) and exploit that crisis to get people to accept as emergency measures what they would never consider otherwise (a point I tried to make in 2014 in “Dangerous propositions”). He perpetuates the happy illusion that a rise in taxes here can be compensated for by lowering them there, when in fact all taxes must rise, at least for a while, if Illinois governments are to make good their foolish promises to the future. It was, remember, taxpayers themselves who, acting as voters, irresponsibly elected and reelected lawmakers who ran up the present pension debt. They’re like a parents who loan their credit card to their college freshman and then blame the kid for not being mature enough to handle it.

In effect, the public wants Rauner and the General Assembly to save them, the voters, from themselves. By letting the state rather than local voters decide what local tax rates are, the freeze is anti-democratic, but that may be part of its appeal. What Illinoisans really want relief from is the obligations of self-government.

Contact James Krohe Jr. at CaptBogue@outlook.com.

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