Thirty or 40 years ago property taxes weren’t as serious a problem as they are today. Even with tax caps enacted in 1991, property taxes have grown faster than household incomes.
The elementary school district, the high school district, the village and the county consume the biggest chunks of our property tax bills. To understand where our tax dollars are going, we must first concede that none of these taxing bodies provide significantly expanded services from what they did 40 years ago.
In Oak Park taxpayers have reacted angrily to the recent reassessments. Oak Park is a few years ahead of Forest Park in terms of rising property values, but we’re headed to the same place. The combination of booming property values and higher tax rates will eventually cause Forest Park property owners to squeal like our neighbors to the east.
Some people have called on local government to cut payrolls. Except for the schools, local government-taken in aggregate-has cut payroll.
If we aren’t getting more services from local government, where is the extra money going? Some is going for higher executive salaries. Some is going for higher pension costs. But the biggest increase is for employee health care costs. Employee health care costs have risen significantly faster than the rate of natural revenue growth.
The Associated Press recently syndicated an article telling readers that companies will see at least 10 percent increases in health care costs in the next year if they don’t pass the costs along to employees.
The article fallaciously claims that employers have shielded employees from increasing health care costs since 1960. Independent consultants pay their own health care costs. What percentage of the workforce were independent consultants in 1960? In 2006? What percentage of corporate jobs included health care benefits in 1960? How about in 2006?
So if employers shirk responsibility to pay the health care costs for employees, taxpayers will ultimately pick up the tab.
According to the Chicago Tribune, median incomes are going down in Illinois. According to the AP, health care costs are rising. And according to the Cook County Treasurer, property taxes are going up whether you pay increases or not.
Some traditional liberals advocate passing a tax swap. Illinois would increase the income tax rate in exchange for relieving the property tax burden. Hating the property tax is easy, because it’s an intrinsically arbitrary tax imposed regardless of ability to pay. While shifting the tax burden from the property tax to the income tax would be an improvement, it would be a reprieve, not a fix.
Rising health care costs would continue to force local government, including schools, to raise property taxes. Teachers would make more money for awhile after the tax swap, but eventually the property tax issue would come to loggerheads again.
The voters are expecting Democrats to fix the Republican debacle in Iraq, so health care and property taxes will be competing for attention with other problems caused by Republican mismanagement. Fixing health care will also require tangling with some huge interest groups: pharmaceutical companies, insurance industry, health care professionals, trial lawyers, etc.
Forest Park’s future is kvetching about property tax bills, unless Congressional Democrats are willing to stare down some powerful special interests. And the most reliable way to build the resolve of Congressional Democrats is for local officials to keep nipping at their heels, crashing their glad-handing sessions and generally forcing them to talk to voters about what is and isn’t being done to control health care costs in Washington.
Local officials need to hold members of Congress accountable, because local government has little power to control health care costs. If Congress continues to duck and neglect the cost of health care, local government and business will suffer.