Illinois residents pay more taxes than any other state
Canterbury, the former owner of Adventure Sports Outdoors, the fishing-hunting publication, recently purchased a home in
"This was a great community. Now it's overtaxed, suffers from high crime and there's no place to work. It breaks my heart," he said.
Canterbury sees taxes as a growing problem here. "They've got a hotel tax, sales tax, flush tax and now a rain tax," he said, referring to Peoria's new stormwater utility fees.
"We (Peorians) have high property taxes, and they can't even fix the roads."
Taxes in
The fact that
According to WalletHub, the state and local tax on an Illinois household earning the median
The median Illinois household pays
The news isn't much better on the business side. Earlier this year, the
How does Peoria compare?
"Peoria taxes are higher than most cities outside of
"Peoria's property tax rate -- 2.6 percent -- is among the highest in the nation. Peoria is also losing population. That means fewer people are being asked to pay the property taxes," he said.
"The average sales tax -- 9 percent -- in
So where does Illinois go from here?
"
Relying on sales taxes has become more important for communities like Peoria due to the fact that 80 percent of what the city receives in property taxes now goes toward paying pensions, predominantly to retirees with police and fire departments, said Urich.
"For several years, the city has recommended to our legislative delegation that they expand the sales tax base to services. This would increase sales tax collections and possibly, the state could also lower rates," he said.
"Illinois has a very narrow sales tax base, and thus relatively high rates," said Urich, referring to the fact that other states may have lower sales tax rates but tax more services than Illinois does.
"The other area we have advocated for is pension reform. While we have focused on public safety pension reform at the local level, the state certainly needs to address it at the state level as well," he said.
"If the state could lessen the reliance on property taxes as well, we would certainly see an uptick in business investment in
Sales tax problems
With property taxes already high, communities have increasingly come to rely on sales taxes.
Other communities with a reliance on sales tax revenue include Morton (38 percent), Washington (34 percent) and Pekin (31 percent).
But Amdall, who attended a recent shop-local news conference in
The reason is the rapid growth of online shopping. Even local big-box stores encourage online sales, he said. "In some stores we have visited, they have a section at the front of the store to pick up online sales," said Amdall.
"The problem with the online sales is that the home-rule cities (Peoria, East Peoria, Washington, Pekin, Morton, Peoria Heights, etc.) receive essentially zero sales tax revenue from online sales because of the way the state distributes the sales-tax revenues," he said.
"What is even worse, is that, if you buy online from one of the local big-box stores, you only pay 6.25 percent sales tax. The home-rule cities receive next to nothing. If you buy the same item in the same big-box store, you will pay 8 to 10 percent sales tax, depending upon the location, and the local city receives its full home-rule sales tax. You can actually buy the same item online, pick it up at the store, and pay less than if you went into the same store to buy the same item. Something is terribly wrong," said Amdall.
How to fix Illinois
While states such as Indiana and Iowa get about 63 percent of Medicaid funding from the federal government, Illinois only gets about 50 percent, said Nowlan. "Covering that cost puts more of a burden on the state," he said.
Nowlan said another tax problem for Illinois towns results from the fact that state funding for schools has decreased in recent years.
"The state has gone from about a 40 percent share to paying less than 30 percent," he said. "That puts a burden on local communities."
"There are lots of ways to slice and dice the state's tax situation," said Nowlan. While aware that
"If we had the courage to broaden the sales tax to include many services, reimpose the tax on retirement income (excluding
Nowlan suggests that
"Economists would call this dramatic property tax reduction regressive because most of the benefits would go to folks with above average income, and it would provide a windfall to property owners, who might see property values climb. Yet what a boost to our struggling economy," he said.
But Nowlan is enough of a political realist to understand that such a sweeping plan isn't likely in a state that haggled for two years without a budget of any kind.
"There are no giants today like one-term Gov.
Other options
While acknowledging that Illinois needs to get its financial house in order,
"A good majority of new clients I come across seem to realize this now which is a good thing," Zeigler said. "And no, it would not surprise me if Illinois began to tax retirement income in the future."
Peoria developer
While taxes are high in
"This community received a gut punch in 2015," he said, referring to news of extensive layoffs by Caterpillar.
Despite news that followed -- Caterpillar moving its headquarters out of town -- Peoria has proved resilient, said Kolbus. "The real estate market is up over the past 12 months. People are investing in our community," he said. Kolbus explained that the average time it takes to sell a home in the Peoria market has gone from seven months to five-and-a-half months.
Source: WalletHub
___
(c)2018 the Journal Star (Peoria, Ill.)
Visit the Journal Star (Peoria, Ill.) at www.PJStar.com
Distributed by Tribune Content Agency, LLC.
Attack ads fly in Taylor-Luria race. We help you sort the truth from the half-truths.
House Commerce Subcommittee Issues Testimony From March of Dimes
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News