By GARY ADKINS
THE Jarvis-Gann amendment, or Proposition 13, shook California like an explosion on June 6 and the shock waves were felt across the nation, including Illinois. Why did Californians approve Proposition 13? And what does it mean? Californians were faced with spiralling property tax assessments which hit them hard through ever higher tax bills. They knew there was a $3 billion surplus of state funds from the state's graduated income tax. Their government wasn't responding; so California voters revolted directly, using the voter initiative process. Many states don't have this process. Californians slashed property assessments back to 1975 levels, limited property taxes to 1 per cent of market value, and put a 2 per cent limit on increases in annual assessments, while restricting new state or local taxes unless 2/3 of voters approve. The consequences will be severe for local governments, with at least $7 billion cut in revenues for police, fire, schools, libraries, welfare, paramedics and other services. The state surplus can be shared with local governments in the short-run. But something will have to go next year or the year after, and many believe social programs and services will suffer. Without a high property tax, however, there should be long-term advantages for California: lower rents, more jobs with business expanding, and tighter government spending with less revenues. Whether these gains will compensate for the loss of social services is another question. In a larger sense, the question raised by the California vote goes to the heart of majority rule: does government work for the good of the whole or for the largest group? Has government taxed middle-class property owners for services they don't want or need? Are these middle-class citizens unwilling to finance programs to help others? Did Californians realize their state would also lose revenue from their state income tax, with the federal income tax getting a greater share of Californians' tax dollars? Illinois is not like California. Here, property taxes are not as high and are not distributed by the state. State government has no huge surplus in the treasury, and the Democratic legislature has "held the line on spending" under a Republican governor. But Illinois does have angry taxpayers. There is great dissatisfaction over the high, unequal property tax and the relentless assessment hikes (see "Property tax system merits reform," March 1978). Local homeowner groups and tax-payer federations near Chicago were holding rallies to oppose increases even before the California explosion June 6. Concurrently, the General Assembly was considering various proposals to limit or cut property taxes. Lawmakers turned down in May a proposal by Rep. Donald Totten (R., Schaumburg) to limit state spending. But once Proposition 13 passed, tax cut proposals in Illinois became the hottest issue for the summer political campaign. Democratic gubernatorial candidate Michael J. Bakalis got behind a tax rebate plan that the legislature passed June 28: H.B. 3279 (see "Roll Calls," page 29). Sponsored by Rep. Daniel M. Pierce (D., Highland Park), it will give a tax rebate to those homeowners or renters whose income is less than $25,000 a year but whose property tax bill is over 3.5 per cent of income. Gov. Thompson has opposed the rebate plan from the start, saying it will cost the state millions in lost revenue that will have to be replaced. But the Democrat-controlled legislature put him in the vulnerable spot of having to veto the popular bill or managing its restrictions. Managing it might mean proposing new sales or income taxes or cutting services. Even an amendatory veto would not look good to voters. Fortunately for Gov. Thompson, the legislature also sent him a less costly property tax relief plan in the form of S.B. 1783, sponsored by Senate President Thomas C. Hynes (D., Chicago). Hynes has a direct interest in the property tax since he is a candidate for Cook County assessor. His bill would reduce assessments on repairs or improvements up to a maximum of $l,000. No state revenue would be lost since the exemption would be applied in future year assessments. The legislature also passed an income tax relief bill, H.B. 2695, which indexes 2 / August 1978 /Illinois Issues the $1,000 personal exemption to rise with the rate of inflation. Observers feel Gov. Thompson will sign both S.B. 1783 and H.B. 2695. Largely symbolic tax relief action, they might help mitigate the unpopular effect of his expected veto of H.B. 3279 (see "Legislative Action"). The governor's chair may be at stake in Thompson's tax revolt response. The revolt is strong in Illinois. There have been taxpayer rallies in Naperville and Deerfield in May, where residents voted to refuse to pay taxes on time. Organizer of those rallies and others similar in Cook, DuPage, Will and Kane counties, was James L. Tobin, president of the National Taxpayers United of Illinois. He urges taxpayers to revolt by not paying their tax bills. Tobin has not payed his 1976 or 1977 property tax bills on his Chicago home. (See "Chicago," page 34, for more on the tax revolt.) Last year, the threat of a tax strike in Cook County moved the county board to cut assessments by 6 per cent (see "Tax revolt in Cook County," January 1978). Douglas Whitley, director of the Taxpayers Federation of Illinois says, "The average taxpayer in this state is being tapped for about 11 per cent of his income just for state and local taxes." But, in Illinois, taxpayers cannot vote directly to change laws. The General Assembly has the lawmaking authority, and it appears the legislators have felt the tremors from the California tax bomb. Although Illinois does not have an initiative petition system of direct democracy, whereby citizens propose new laws for approval by statewide referendum (one million voters signed a petition in California to get Proposition 13 on the ballot), "advisory" questions may be put on the statewide ballot. The Coalition for Political Honesty, a Chicago-area citizens' lobbying group, started circulating petitions for an "advisory referendum" on a proposed tax cut the day after Proposition 13 passed. 6/August 1978/Illinois Issues
|
||||||||||||||||
