$45M included in budget for previously unfunded property tax relief

By Sean Reed | The Center Square
The Center Square

(The Center Square) – Included in the recently passed state budget, the Illinois State Board of Education will get money for property tax relief. Statehouse Republicans called for the relief program to be funded after the funds were not included in the budget for the current year.

In the final hours of talks regarding Illinois’ record $55.9 billion spending plan for the 2027 fiscal year, lawmakers noted that the budget included $45 million for ISBE’s Property Tax Relief Grant program.

As a Senate Democrat Leader on Appropriations, Sen. Elgie Sims Jr., D-Chicago, said the $45 million allocation for the coming year is because the state was able to complete a study on the effectiveness of the program.

“This budget will include the $45 million dollars to cover the property tax relief grant, but also as part of the implementation of that grant, the district – if they are to get the grant – will have to abate property taxes for three years,” Sims noted.

Previously, statute required property tax abatement, or the temporary lowering of the overall tax base for the district, for only two years.

Sen. Don DeWitte, R-West Dundee, argued the state budget doesn’t include true property tax relief for Illinoisans.

“As Springfield continues to sweep money away from local governments, the money does not magically reappear. Cities and villages are forced to make a choice. You either cut services to your constituents or you raise property taxes,” DeWitte said.

The senator’s argument hinged upon the amount of money that the state sends back to local governments as part of the Local Government Distributive fund. He argued that because the budget maintains a flat percentage of state income tax revenue, rather than the full 10% that was originally given to localities, property taxpayers are going to see higher rates no matter what.

Deputy Minority Leader Rep. Ryan Spain, R-Peoria, however, shared on the House floor and in the House Executive Committee on Sunday that he was appreciative of the inclusion of funding for the grant program.

“There are changes that have been made that I greatly appreciate. We’ve gone from an introduced budget that further reduces the local government distributed fund and we’ve corrected that,” Spain said. “We’ve restored property tax relief grants.”

Within the bill that guides how the FY27 budget will be implemented, language is included as to how the $45 million will be distributed.

According to the state law, ISBE will distribute property tax relief grants to applicant school districts based on which districts have the “highest adjusted operating tax rate.”

Grant funds would only be given to a school district if the school district files with its county clerk to lower the property tax levy for the coming three years.

ISBE will still be required to publish a list of school districts around the state that will qualify for the funds.