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Property Taxation in Illinois

A Framework for Reform

Nathan B. Anderson and Therese McGuire

July 2008, English

Illinois is one of 23 states that limit both local property tax rates and property tax revenues. Because of its importance to local government finance, reforms of the Illinois property tax system are constantly debated and the debates recycle over the years. In order to discuss the potential benefits and costs of the property tax limits in Illinois, we compare a property tax system with limits to an unfettered system. By an unfettered system we mean a property tax system without limits on the access of jurisdictions to their tax base and the assessment of every property at its current market value. We make the comparison of an unfettered system to a limited system using the criteria of equity, efficiency, and simplicity, and we assume that the limited and unfettered systems collect the same amount of property tax. Comparing the equity, efficiency, and simplicity properties of constrained and unfettered systems identifies and clarifies important issues concerning the direction of and need for property tax reform.


Assessment, Local Government, Property Taxation, Tax Reform, Taxation