Cook County Treasurer Maria Pappas
March 2026
Introduction
Local government leaders in Cook County have raised property taxes during the past 30 years at twice the rate of inflation and at a rate that outpaced the growth in wages, meaning a larger share of people’s income is going toward paying their tax bills.
The local governments sought about $19.2 billion in property taxes in 2024, a nearly 182% increase from the $6.8 billion they had asked for 30 years earlier in 1995. Inflation during that same time rose by less than 91%, while average wages grew by about 161%.
Hundreds of Cook County governments — cities, villages, schools, townships, park districts and, to a lesser extent, other taxing agencies — have routinely increased property taxes to pay for their operations, often with little public scrutiny.
The thirst for property tax dollars comes as Illinois gives a lower percentage of money to schools than any other state and as it has cut the percentage of income taxes it shares with cities, villages and towns. At the same time, the state has forced municipalities to significantly increase their police and fire pension fund contributions to make up for years of underfunding.
Politicians and other government officials have quietly used special taxing districts to raise money and exploited loopholes to work around state laws designed to rein in their taxing and spending.
School districts, which accounted for nearly 55% of the county’s property taxes in 2024, hiked taxes by 189.4% during the past 30 years to pay for teachers’ salaries, textbooks, transportation, building maintenance, construction and other operating costs.
Cities and villages also sought substantially more money from taxpayers. Municipalities, which accounted for about 18% of county taxes, increased the amount of money they sought by 201% to provide services such as police protection, garbage pickup and road maintenance. That does not include revenue from tax increment finance (TIF) districts, special taxing districts set up and controlled by municipalities. Bills for TIF districts soared to nearly $1.85 billion from $160 million, a 1,034% increase.
The 400-plus TIF districts in the county accounted for more than 9.5% of all county property taxes in 2024, up from 2.4% in 1995. The county’s 30 suburban townships, which account for less than 1% of all property taxes in the county, increased the amount they sought by a combined 184%. Cook County government’s property tax levy — about 5% of total taxes — increased by 26%, less than one-third the rate of inflation.
Other governments, which accounted for 11.6% of all taxes billed, increased their taxes by more than 110%. Those governments include sanitary, park, library and fire protection districts, community colleges and the Metropolitan Water Reclamation District.
The Treasurer’s Office has previously examined how assessments, appeals, race and income, voter turnout and tax sales impact who pays what and how much under Cook County’s sprawling property tax system.
This study focuses on taxes imposed by hundreds of local government agencies and the impact they have had on homeowners’ and businesses’ pocketbooks. An increasing share of people’s income has gone to pay property taxes. Some, unable or unwilling to pay ever-escalating bills, have lost their homes or businesses in tax sale and mortgage foreclosures.
Top Drivers of Property Taxes
Public Schools Rely on the Property Tax
The county’s 153 school districts account for the bulk of property taxes imposed on Cook County’s homes and businesses, with their taxes topping $10.5 billion in 2024. Schools cumulatively hiked property taxes at nearly double the rate of inflation during the 30-year period analyzed — despite state laws designed to limit annual school budget increases to the rate of inflation or less.
An Explosion of Tax Increment Finance Districts
Another key source of revenue for governments is tax increment financing districts, which divert a portion of property tax revenues to pay for development costs. TIF district taxes in Chicago and the suburbs swelled to more than $1.8 billion from $160 million, a whopping 1,034% increase. The number of TIF districts ballooned to 418 from 154, while the number of properties in those districts grew to 281,880 from 18,314.
- Chicago TIF district taxes jumped to nearly $1.4 billion from less than $44 million, a 2,975% increase. The number of Chicago TIF districts jumped to 108 from 30, with the number of properties in those districts growing to 242,080 from 3,413.
- Suburban TIF district taxes rose to $490.3 million from $118.4 million, or 314%. The number of suburban TIF districts grew to 310 from 124, and the number of properties in those districts grew to 39,800 from 14,901.
Public Pension Funding Mandates
While total annual property taxes for all of Cook County nearly tripled, the percentage increase was significantly higher in Chicago than in the suburbs. City taxes saw a particularly steep jump in the last ten years, as the city and Chicago Public Schools grappled with rising pension payments mandated by the state to prevent insolvencies.
- Taxes imposed by Chicago Public Schools, City Hall and all other local governments within the city rose to nearly $8.9 billion in 2024 from about $2.9 billion in 1995, a 211% jump.
- Overall taxes in 134 suburbs, including schools, municipalities, park districts and other agencies, rose to $10.3 billion from less than $4 billion, a 160% increase.
State Revenue Sharing Cuts
The total amount of taxes imposed by the county’s 135 municipal governments, including Chicago, grew to $3.5 billion from $1.2 billion, an increase of 201%, as the state cut the percentage of revenue shared with cities, villages and towns.
- Chicago raised property taxes to nearly $2 billion from $650.7 million, a 202.4% increase.
- Suburban municipalities raised their property taxes to $1.5 billion from $516.1 million, a 199% increase.
Cook County Holds the Line, Townships Don’t
Cook County, which has a policy of avoiding property tax increases and instead hiked the sales tax to cover increased costs, bucked the 30-year trend. Townships did not, but they still have low taxes in comparison to other governments.
- Cook County government, which accounted for 5% of all taxes billed, increased property taxes to $963.9 million from $762.3 million, or 26%. Adjusting for inflation, Cook County property taxes decreased by nearly 34%.
- Cook County’s 30 townships raised property taxes to $161 million from $56.7 million, an increase of 184%. But townships account for less than 1% of the total property tax burden in the county.
Other Governments’ Mixed Record
The total amount of property taxes billed by all other government agencies in Cook County rose to $2.24 billion from nearly $1.1 billion, an increase of 110%.
- Notably, the percentage property tax increase for the second largest of those agencies — the Chicago Park District — fell below the inflation rate, rising to $326.3 million from $221.8 million, or 47%.
Loopholes Allow Taxes to Soar Countywide
Despite efforts by the General Assembly to limit government officials’ ability to increase property taxes, the overall tax burden on Cook County property owners grew much faster than inflation. That is in large part due to significant and expanding exceptions and loopholes in the state’s primary tax limitation law.
Nearly four decades have passed since the state of Illinois — at the urging of the late Gov. Jim Edgar and suburban legislators — attempted to halt runaway property tax growth that in many cases was outstripping homeowners’ ability to pay.
Long before the 1970s, the state set maximum tax rates and placed limits on local government borrowing, but those controls did little to keep bills in the Chicago area from soaring during that decade and the next, particularly in counties immediately surrounding Cook.
In those counties, property values spiked during a population boom in the 1970s and 1980s. Many school districts held tax rates steady, with their leaders claiming they were holding the line on taxes. In reality, because property values jumped significantly, the districts had dramatically increased levies to levels well beyond what was essential to pay for their growing student populations.
Legislators in 1981 tried to control tax increases by passing the Truth-in-Taxation Law. The law required agencies to hold a public hearing if they wanted to raise levies by more than 5% in one year. Lawmakers thought the added public scrutiny would stop officials from passing large tax hikes. But few residents attended the hearings and little changed.
Angst over rising property taxes persisted through the 1980s and served as a prime campaign issue for then-gubernatorial candidate Edgar, who was elected in 1990. The next year, legislators passed the Property Tax Extension Limitation Law, or PTELL. The law targeted the booming collar counties and limited annual property tax increases by non-home rule governments to the rate of increase in the Consumer Price Index or 5%, whichever was less.
In 1994, PTELL was expanded by the General Assembly to include Cook County. It was later applied to dozens of other counties via referendum. The law applied to school districts, as well as park and library districts. It had one big caveat: it exempted home rule municipalities, which have additional powers, including the ability to enact higher taxes.
PTELL also contained other notable exceptions.
For example, when a TIF district closes, local governments, including school districts, can add the value of properties previously taxed just for the TIF district to their own tax rolls. That maneuver allows governments to hike property taxes above their normal PTELL limits.
And, when an agency creates a new fund — like CPS did in the mid-2010s, when the General Assembly approved the schools’ request to reinstate a levy dedicated to pensions — it increases taxes beyond PTELL limits for at least the first year the tax is imposed. In the case of CPS’ pension levy, legislators went a step further by not subjecting the tax to PTELL limits in future years.
Government officials can ask voters to override PTELL limitations through a referendum, where voters are asked to approve tax increases, which they frequently do. Referendums often are put before voters in very low turnout elections, which allow a minority of motivated voters to decide whether taxes are increased.
Also, PTELL does not limit surplus TIF funds that are distributed to schools and local governments. For example, in 2024, nearly $434 million in city of Chicago TIF surplus dollars were distributed to taxing agencies — above and beyond the amounts each of those agencies received from their regular tax levies.
It also excludes taxes for certain types of bond debt, including bonds that voters approved in a referendum, bonds that were issued before PTELL went into effect and new bond issues that do not lead to an overall increase in a taxing agency’s debt level.
Finally, a law that took effect in 2021 allowed non-home rule agencies to boost taxes each year by “recapturing” money that had been refunded the previous year to property owners who successfully appealed their taxes. This so-called recapture law has allowed government officials to bypass PTELL limits and add between $131 million and $203.7 million annually to their tax levies.
The upshot: officials in non-home rule districts across the county have been able to work around PTELL and increase property taxes well beyond the rate of inflation.
What Drove the Runaway Tax Increases?
School Districts Cost the Most
PTELL exceptions have allowed school officials to increase taxes at nearly twice the rate of inflation between 1995 and 2024. For homeowners and businesses, that’s significant because schools account for the bulk of tax bills.
School districts routinely raise taxes as much as legally allowed to secure future funding, even if the current year’s budget would be covered by a smaller increase — or none at all.
School officials lean heavily on property taxes because the state of Illinois provides just 24.5% of K-12 public education costs — the lowest percentage of any state, according to the Center for Budget and Tax Accountability. Although Springfield has ramped up education funding in recent years, public education in Illinois still will not be considered adequately funded until 2034.
In addition, CPS is the only public school district in Illinois required to pay most of its pension costs.
The Chicago Teachers’ Pension Fund, or CTPF, was established by the Illinois General Assembly in 1895, 20 years before the creation of the first statewide teachers’ pension fund. To this day, CTPF remains a distinct entity with its own governing board and funding responsibilities.
Other school districts are part of the Illinois Teachers Retirement System, or TRS. They paid 1.3% of their pension liabilities in 2025, totaling $84.4 million. The state picked up 97.1%, or $6.2 billion, with the rest coming from federal funding.
In 2025, CPS was responsible for paying 65% of its pension liabilities totaling $661.6 million; the state covered the other 35%, paying $353.9 million. CPS projected that $558.7 million of its pension contributions would be covered by its special property tax levy dedicated to paying those costs, with the rest covered by its regular operating levy revenue.
The fact that CPS pays the bulk of its pension costs creates pressure to increase property taxes. CPS’ pension costs have grown dramatically in recent years, in part because CTPF has less than half the assets it needs to pay for future pension benefits.
Put simply, city taxpayers pay double, because they help cover the cost of both Chicago’s and the state’s teacher pension systems. Suburban taxpayers only pay once.
Municipal Costs Add Up
Of the 135 municipalities partially or wholly within Cook County’s boundaries, 94 are home-rule governments and are not bound by PTELL.
Municipalities have faced significant financial pressures during the past couple of decades, including the 2001 recession caused by the popping of the dot-com bubble and the 2007-2009 Great Recession triggered by the collapse of the housing market. Those economic slumps decreased municipal sales tax revenue, as well as the amount of money suburbs receive from their share of state income taxes. The slumps also led to investment losses in public pension funds, in many cases putting them in financial peril.
Those events caused many municipalities to hunt for new taxes, or to increase property tax levies, which hold steady rather than rising or falling with the economy. In Schaumburg, which had no property tax for more than a half century and paid for services largely with outsized sales taxes from Woodfield Mall, village leaders enacted the first property tax in the suburb’s history.
The state’s decision to slash the percentage of income tax revenue shared with municipalities created further financial hardships for municipalities.
Prior to 2011, Illinois passed on 10% of its income taxes to local governments through the Local Government Distributive Fund. In 2011, Illinois raised its income tax rate to 5% from 3%, raking in billions of dollars in new taxes. Instead of sharing 10% of income tax collections, the state passed on only 6%, erasing additional money cities, villages and towns expected to receive.
Since then, the state has not shared more than 6.5% of its income tax revenue with municipalities, despite lobbying efforts by the Illinois Municipal League. According to the DuPage Mayors and Managers Conference, these cuts cost local governments $8.3 billion in potential revenue, pressuring cash-strapped local governments to raise property taxes.
As municipalities grappled with diminished state funding, they also faced significant shortfalls in their public pension funds, leaving many at risk of becoming insolvent. To address that issue, the state mandated that all municipal police and fire pension funds contribute enough money each year to bring their funding levels up to 90% by 2040. That date was later pushed back to 2055 for Chicago. The increased funding for suburbs started in 2011 and for Chicago in 2015.
The new mandate prompted Chicago and the suburbs to hike property taxes. In Niles, after cutting services for years to make required police and fire pension contributions, trustees in 2021 approved increasing the village’s property tax levy by a whopping 88%, later trimmed to 63%.
Hefty tax increases in other suburbs contributed to the overall rise in property taxes across the county. In total, suburban municipalities increased property taxes by 199% during the past 30 years.
To be clear, each suburb has its own government leaders and policies, leading to different approaches on property taxes. Some suburbs turned to other money sources before increasing property taxes, and several have no TIF districts. To see what has happened with property taxes over time in each suburb, please see this interactive table.
Chicago faced additional financial pressure because its municipal employees’ and laborers’ pensions were severely underfunded. The suburbs instead relied on the financially sound Illinois Municipal Retirement Fund for their non-police and fire personnel.
In the early and mid-2000s, then-Chicago Mayor Richard M. Daley avoided significant tax hikes, in part by underfunding the city’s pension systems. Yet, even with that underfunding, the city faced revenue shortfalls in other areas. In response, Daley sold off city assets, entering a 99-year lease of the Chicago Skyway for $1.83 billion, a 99-year lease of downtown parking garages for $563 million and a 75-year lease of the city parking meter system for $1.15 billion.
Those deals helped Daley pay for Millennium Park and fill city budget holes, but none of the money they generated was used to bolster the city’s four pension funds, which continued to rack up significant debt. The sales also stripped the city of the recurring revenues that came from the toll road, parking garages and parking meters, forcing the city to turn to other revenues, including the property tax, to make up the difference — but the condition of its pension funds continued to worsen.
Then, in 2014, the state forced the city’s hand. It required Chicago to reach 90% funding for the municipal fund by 2058 and the laborer’s fund by 2055. Later, the laborer’s fund also was given until 2058 to reach the 90% target.
Instead of turning to the property tax, former Mayor Rahm Emanuel and the City Council enacted a telephone surcharge to boost contributions to the laborer’s fund. One year later, in 2015, the city increased taxes on water and sewer services to boost funding for its municipal pensions system.
Also in 2015 — as the General Assembly sought to require Chicago to reach 90% funding for the city’s police and fire funds by 2055 — the City Council approved Emanuel’s plan to enact a $588 million property tax increase to be phased in over four years. All but $45 million of the tax increase was designated for the city’s police and fire pensions.
Former mayor Lori Lightfoot, who succeeded Emanuel, increased property taxes by $93.9 million in 2020 and by $76.5 million in 2021. Largely as a result of those significant increases, city of Chicago property taxes, excluding TIF districts, have increased by 101% since 2014 — compared to just 50% from 1995 to 2014.
TIF District Taxes Explode
TIF districts, little understood by the public, have become a go-to tax tool for city, village and town officials.
When a municipality creates a TIF district, the value of each property taxed by all local governments in the designated area is frozen for up to 23 years, but the freeze can be extended for additional years with state approval. As property values within the district rise above their frozen levels, the increased value — known as the increment — is taxed by the TIF district at the same rate as all of the other taxing agencies combined.
The new tax dollars diverted to the district are then used to subsidize private development and related infrastructure improvements. The goal is to expand the tax base and create jobs.
Crucially, tax increases within TIF districts are not constrained by PTELL.
That, in part, explains why the biggest percentage increase in taxes during the past 30 years flowed from TIF districts. TIF taxes across the county grew to more than $1.8 billion from $162.4 million, a more than eleven-fold increase.
Contributing to that explosive increase was the dramatic growth in the number of TIF districts across the county, particularly in Chicago, where Daley often touted the benefits of TIF projects during his record 22-year tenure.
By the time he left office in 2011, the number of TIF districts had grown more than sevenfold, reaching a peak of 163. In 2024, Chicago’s 108 TIF districts generated $1.35 billion in revenue — a massive increase from the $44 million they generated in 1995.
As a result, TIF revenue grew at a far faster pace than the revenue collected from general property taxes.
Emanuel and Lightfoot also took steps that drove up TIF taxes, particularly by creating two transit TIF districts. They were designed to match federal funding for the CTA’s modernization of the Red and Purple commuter rail lines, as well as the extension of the Red Line farther south, but they also boosted funding for other taxing districts, especially CPS.
In transit TIF districts, money generated by the district is shared with CPS and the city’s other taxing agencies — above and beyond their normal levy that is subject to PTELL. Since 2016, nearly $878 million in taxes billed were slated to be returned to CPS and other taxing agencies, with CPS expected to get $746 million of that amount.
In the suburbs, the use of TIF districts was more widespread in 1995 than it was in Chicago. The suburbs had 124 TIF districts compared to the city’s 40. The number of suburban TIF districts grew significantly over 30 years, with 310 as of 2024, and TIF revenue rose to $490.3 million from $118.4 million.
Still, growth in suburban TIF dollars as a whole did not compare to the massive increases in the city. TIF revenue in the suburbs grew by 314% during the past 30 years — a small fraction of the nearly 2,975% TIF tax growth in Chicago. And, since the Great Recession, when declining property values wiped out much of the previous growth in suburban TIF districts, suburban TIF taxes have increased by just 29%.
Cook County Government Looks for Money Elsewhere
Cook County government has bucked the upward spiral of property taxes, with its levy growing by less than 27% — well below the 91% inflation rate. That’s largely because the county in 1994 made it a policy to not increase taxes on existing property owners.
The growth in property taxes since then occurred when the county taxed newly constructed buildings and other facilities and captured the increment from closed TIF districts. Once a TIF district closes, agencies including the county can tax, or capture, the additional assessed value in the district. Those taxes, along with taxes on new construction, are not bound by PTELL limits.
In late 2015, Cook County Board President Toni Preckwinkle considered two options to increase pension funding and address other county financial challenges: raise property taxes or increase the sales tax. County commissioners rejected a property tax increase and narrowly approved raising the sales tax to 1.75% from 0.75%.
Although the additional 1% in sales tax initially was projected to bring in about $474 million a year, it now generates far more. In 2024, the county collected more than $652 million, about four-fifths as much money as the $816 million in billed property taxes, according to an analysis of county budget documents. The growth in sales tax dollars offset any need for a major property tax hike, causing the county’s property taxes to fall in inflation-adjusted dollars.
Townships, a Small Factor, Nearly Tripled Their Taxes
The county’s 24 township governments — which provide services including assistance to low-income residents, and road and bridge maintenance in unincorporated areas — increased their taxes to $161.1 million from $56.7 million, or 184%. Townships only account for 0.84% of the county’s property taxes.
Still, tax reform advocates and some politicians have long contended that taxes would be lower if county and municipal governments absorbed township duties. The city of Evanston in 2015 took on the duties of its township government after voters agreed to disband it; the consolidation saved nearly $780,000 in that year alone.
It was easier to consolidate city and township government in Evanston, given that the city and township shared identical boundaries, which is not the case with most township governments. In Cicero, the only municipality in Cook County that has a town form of government, township and municipal services have always been combined.
Other Taxing Agencies Mostly Hold the Line
The amount taxed by all other government agencies in Cook County rose 110.5% during the thirty years studied, with total taxes increasing to $2.2 billion from $1.1 billion. That exceeds the inflation rate of 91%, but not by nearly as much as schools, municipalities and TIF districts.
The Chicago Park District, which also collects money from events like Lollapalooza and fees for recreational programs, limited its property tax increases. The Park District billed $326.3 million in 2024, up from $221.8 million in 1995, an increase of 47%.
Reforming the Property Tax System
Calls to lower the outsized burden that the Illinois property tax system places on businesses and homeowners stretch back decades. None led to substantive changes.
A Tax Reform Commission created in 1982 by then-Gov. James Thompson called for allowing installment tax payments, replacing half of school property taxes with state funding and replacing homestead and senior homeowner exemptions with an income-based, state-funded “circuit breaker” program that would help lower-income homeowners pay their taxes. Illinois now allows for taxes to be billed up to four times per year, but none of the other steps were taken.
In 1997, then-Gov. Jim Edgar recommended raising income and other taxes to bring in additional money to pay for $900 million in property tax relief and provide an additional $614 million in school funding. The House passed the bill, but it failed in the Senate.
Ten years later, in 2007, the Property Tax Reform and Relief Task Force made several recommendations, including rebalancing various state taxes to rely less on the property tax, consolidation of government services, establishing a more robust circuit breaker program and TIF reforms. Some TIF reforms were enacted, but none lowered the overall tax burden.
In 2014 and again in 2024, voters approved an advisory referendum that asked if a 3% income tax surcharge should be placed on individual income above $1 million. The first proposal aimed to use the money for school funding, the second to provide property tax relief. But the General Assembly never placed a constitutional amendment needed to enact the tax on the ballot.
In 2019, Governor JB Pritzker formed the Property Tax Relief Task Force. Although the task force never reached consensus and failed to issue a final report, a draft leaked. Merging taxing agencies, expanding the sales tax to increase the state’s funding for schools, sharing a portion of all TIF revenues with schools and closing PTELL loopholes were among the report’s recommendations. Nothing came of it.
Illinois in 2025 had the highest residential property taxes in the nation, and the city of Chicago has the highest commercial property tax and second-highest industrial property taxes in the nation, according to the Tax Foundation. In Cook County, where residential taxes have increased dramatically, property tax protests are increasingly frequent.
But easing the tax burden will not be easy. Schools rely heavily on property taxes because of inadequate state funding; local governments rely on them to pay down pension debt; the fiscally strapped state currently does not bring in enough revenue to provide alternative funding; PTELL is full of loopholes; and the state’s nation-high number of local governments stymies efficiency.
Nevertheless, there are paths to ease the burden.
Potential Solutions
Eliminate loopholes in the state’s Property Tax Extension Limitation Law
Loopholes that could be eliminated include those that allow CPS to increase taxes beyond PTELL limits to cover pension payments and those that allow local governments to exceed limits when a TIF district is shuttered or a previously tax-exempt parcel is added to the tax rolls.
When PTELL was enacted, it specifically excluded the CPS pension levy from tax limits. As a result, the pension levy often grows faster than inflation. Limiting the pension levy would control its growth.
When TIF districts shut down, agencies like CPS, the city of Chicago and Cook County government routinely capture the increment, meaning they add the growth in assessed value to their own tax rolls. If newly added assessed value from closed TIF districts were not entirely exempt from PTELL, tax rates would go down.
New assessed value that is added to the tax rolls when non-profit properties change hands — like when a government-owned property is sold for private use — also is currently exempt from PTELL, even though that does not necessarily lead to a need for increased services.
Enact an income-based circuit breaker program to ease the financial pain for lower-income taxpayers
Under circuit breaker programs in many other states, the government determines a maximum percentage of annual income that homeowners should pay in property taxes. The state then provides income tax credits, which are sometimes refundable, to repay homeowners for any taxes above the maximum percentage-of-income threshold.
A circuit breaker program would not reduce overall taxes, but it would reduce the amount paid by the state’s lowest-income homeowners. However, an income-based circuit breaker program could prove costly to the state and likely would require raising additional revenue.
Consolidate local governments to cut costs and redundancies
Illinois school districts and local governments rely heavily on property taxes to pay for services, but proposals to eliminate or consolidate government agencies to save taxpayers money often meet fierce political pushback as officials fight to hold onto their fiefdoms and taxpayers resist school consolidations.
One target ripe for consolidation is having municipalities or the county absorb township government duties, as Evanston did with the township government that shared its boundaries. Other municipalities with coterminous townships include Berwyn, Oak Park and River Forest.
CPS also could close some of its schools where enrollment has plummeted, especially given that more than half its schools are deemed underutilized and almost 31% operate at less than half their capacity.
Reduce state and local government pension obligations to lower the percentage of property tax dollars spent on pension contributions
Former Chicago Mayor Rahm Emanuel in 2014 engineered the passage of a state law that would have cut city worker pension benefits and required workers to contribute more to their retirement. But the Illinois Supreme Court in 2016 unanimously ruled those changes unconstitutional, based on the 1970 state Constitution that says pension benefits “shall not be diminished or impaired.”
The Supreme Court a year earlier did leave open the possibility that benefits could be diminished if the unions were given something in return, but legal scholars have noted that’s a difficult needle to thread.
Another option would be to get unions to bargain, with the understanding that reduced benefits would be better than none in the case of insolvency. That would be a tough sell to the unions, who are bolstered by the high court’s ruling.
Unions have significant political influence in the state capitol, where they are largely aligned with the Democratic supermajorities in both chambers and with Gov. Pritzker, also a Democrat — so much so that in July 2025 the state chose to sweeten pension benefits for Chicago police and firefighters that annually added tens of millions of dollars in annual costs to city taxpayers.
Increase state funding to local governments to reduce their reliance on property taxes
Restoring the percentage of state income taxes distributed under the Local Government Distributive Fund to 10% would send billions of additional dollars to cities, villages and towns.
To decrease property tax pressure faced by CPS, the state could provide pension funding for Chicago’s school system that matches the level of all other school districts in the state. That would increase annual state funding for CPS by more than $650 million.
Another idea that has been floated by the CPS board, The Civic Federation, former Illinois Senate President John Cullerton and others is to merge the city and state teachers’ pension systems. The two pension funds in 2025 had comparable funding ratios: TRS reported an actuarial funding ratio of 47.8% — only 0.1% less than CTPF’s reported funding ratio of 47.9%.
Consolidating the two funds would free Chicago residents from the double burden of paying for two teachers’ pension funds. That could yield additional savings in the form of eliminating duplicate functions like administrative overhead.
But the Chicago Teachers’ Union and CTPF oppose that idea, saying they want to retain control over their pension fund and investment decisions. CTPF has explicitly rejected reducing or sharing revenue from its special property tax levy.
Springfield could ease financial pressure on schools by increasing education funding levels to match its own evidence-based funding formula, which determines how much state aid each public school district receives. And to help the most financially strapped school districts, teacher pension funding could be incorporated into the evidence-based funding formula, because the state currently pays far more in pension costs to wealthier districts than less-affluent ones.
However, finding the money to increase education funding is easier said than done, given the precarious state of Illinois government finances. The state projects a budget shortfall of $5.1 billion by 2031. To ease the property tax burden, the state would have to come up with new ways to tax its residents, cut spending or both.
Paying for the Fixes
Previous ideas to increase revenue include enacting a so-called millionaires’ tax, which former Gov. Pat Quinn has proposed to fund property tax relief; expanding the state’s sales taxes to apply to more services; taxing the portion of retirement income that surpasses $100,000 per year; and replacing Illinois’ flat 5% income tax with a progressive income tax that taxes higher incomes at greater percentages on a sliding scale, which voters rejected in a November 2020 referendum.
The political landscape has changed since 2020 when the referendum was defeated. A number of Democratic politicians, including former House Speaker Michael Madigan, who has since been convicted, were under criminal investigation. In addition, billionaire Ken Griffin, who has since moved out of state, spent $54 million successfully opposing the tax.
Pritzker, who proposed the graduated income tax, estimated it would bring in an additional $3.4 billion a year.
Despite the defeat of the graduated income tax, voters have favored another way of getting the state’s wealthiest residents to pay more in taxes. In two advisory referendums, voters approved placing a 3% tax surcharge on individual income above $1 million, which was estimated to raise $4.5 billion a year. Like Pritzker’s proposal, doing so would require a constitutional amendment.
One way to increase taxes on higher earners without changing the Illinois constitution would be to raise the state’s existing income tax while also providing an income tax credit to lower-income taxpayers. The Center for Tax and Budget Accountability Executive Director Ralph Martire, who helped draft the state’s school funding formula, estimated in 2021 that a 1% income tax increase under that scenario could raise more than $2.4 billion each year, and a 1.5% increase could raise over $3.6 billion.
Illinois also could expand its sales tax to apply to more services, an idea championed by the Civic Federation, Chicago Metropolitan Agency for Planning, Center for Tax and Budget Accountability and Illinois Economic Policy Institute. Those groups estimated that an expanded sales tax would generate $2 billion a year in state revenue, a portion of which could be used for property tax relief. The tax also would generate hundreds of millions of dollars for municipalities, counties and the Regional Transportation Authority.
Illinois’ current sales tax primarily targets goods, not services. The new taxes — targeting services like personal care, gym memberships, business services and online subscriptions — would hit wealthier households harder than low-income households because high-income households spend far more on services, the groups concluded. They also suggested using some of the new revenue to provide tax relief to low-income households.
Taxing the portion of annual retirement incomes that exceed $100,000 would raise $1.8 billion a year, the Civic Committee of the Commercial Club of Chicago projected in 2023 — although that group suggested the money be used to bolster state pension funding and reserves. Of the 42 states that tax income, only three — including Illinois — exclude retirement income, such as social security, pensions and 401k withdrawals.
These proposals have been bandied about for years, but they have either been rejected by voters or were never acted on. Some opponents of Illinois’ effort to enact a graduated income tax criticized Gov. Pritzker and other Democratic lawmakers for not guaranteeing property tax relief in their plan.
Now, a measure signed into law in 2024 requires that the Illinois Department of Revenue conduct a comprehensive study of the state’s property tax system. The agency has until the end of July 2026 to issue its report.
In the meantime, skyrocketing property tax bills have caused rising anger among homeowners in the city of Chicago, particularly less wealthy homeowners, and the rest of the county. The time may be ripe for the General Assembly to finally provide property tax relief to Illinois residents and businesses.
About the Pappas Studies
In March 2021, Treasurer Pappas created a Research Unit within her office. She instructed the unit to examine Illinois’ complex and sprawling property tax system and come up with recommendations for reform.
Earlier studies led to state laws that closed tax loopholes and that lowered interest rate paid by delinquent property owners.
Among the major studies the Research Unit has produced:
• A redesigned debt study released in June 2021 and updated in April 2023 that measured the level of local government debt attributed to each property in Cook County.
• Annual analyses of property taxes billed from 2021 to 2025. Each analysis identified major reasons for property tax changes and showed where property owners faced the highest increases.
• A Scavenger Sale study released in July 2022 that traced swaths of vacant and abandoned properties back to the federal government’s sanctioning of redlining — discouraging mortgage loans in minority areas — in the 1940s.
• A study on sales in error released in October 2022 resulting from Cook County tax and scavenger sales that found wealthy investors were exploiting a loophole in Illinois tax law to make millions of dollars.
• Two studies on voter turnout for property tax-related referendums in Cook County released in March 2024 and March 2025 that found turnout was frequently low for referendums that resulted in $1 billion in new debt and higher tax levies.
• A study on assessment appeals released in May 2025 that found appeals shifted $2 billion in taxes onto homeowners from businesses during a three-year period.
In addition to major studies, the research team has also published “How the Illinois Property Tax System Works,” a primer on the tax system, and several “Pappas Portal” newsletters that explore local tax laws, fiscal debt and property tax collection rates.
Contributors
Lead Author and Researcher
- Harjas Sandhu, Research Analyst
Editors
- Todd Lighty, Research Consultant
- Hal Dardick, Director of Research (hdardick@cookcountytreasurer.com)
Other Contributors
- Christopher Silber, Research Analyst
- Dale Wunderlich, Data Integration Analyst
- John Baird, Intern
Data Dashboard