Should Illinois therefore Chicago. Get a federal bailout of Penion debt? Now that Puerto Rico did? (Naperville: best city, renting)

[Mathguy]

Originally Posted by kettlepot

San Diego faced a similar situation a decade ago because of a corrupt and unaffordable pension system. Firefighters spiked their pay with overtime during their last working year to goose the pension. A DROP program was implemented that allowed employees to purchase credit for years worked that assumed an unrealistically high rate of return on their purchased credits. Bankruptcy was seriously considered as a way to bust the pensions that had been extracted under unethical conditions. The city lost access to the bond market because its financial statements were unauditable.

In the end, the city resolved the situation by cutting and cutting and cutting. The pension system was closed to new employees and the city switched to a 401k system for them. Pay rates were frozen for several years. Certain payments to employees continuing under the existing pension scheme were excluded from pensionable pay. Streets went unpaved and trees untrimmed. Vacant positions were not replaced throughout the system and hours worked were cut back at libraries and recreation centers. For a time, one entire floor of City Hall ended vacant because of the reduction in employees. Every fee was reviewed to see if it was fully recovering the cost of the service provided. The pension also borrowed money at very low rates and invested it believing they could make more of a return than the money cost, and they succeeded.

Today, the city's financial situation is sound, though not necessarily robust. The decaying state of the city's public infrastructure is a long term problem, however, the pension is sound long term. Other than increases in fees, the city did not raise any taxes. However, to address the accumulating infrastructure problem, the sales tax may be increased, but that will be done only now that public confidence has been won back because the city addressed the systemic problems first.

Great post. This is the problem with politically insular areas (whatever party) having complete control. They bought votes with HUGE payoffs that did not have to be funded for decades.

[MSchemist80]

Originally Posted by Mathguy

The cap on CA property often benefits rich, older property owners.

I've read numerous articles about how a elite property in San Fran was worth 60mil but paid 15k in property taxes....but that if sold the new owner would be paying >100k.

As opposed to here in Illinois where typical middle class homeowners are paying $10k bills in many areas (between 2.5-5% of the value). A cap would help everyone and stop local govt from seeing property taxes as an endless money tree. We badly need a proposition 13 or Indiana equivalent control to stop the Dummycraps from destroying home ownership in this state.

[Liledgy]

Ms, can you show some data that backs up your claim of 10k property taxes for a typical middle class homeowners? I know it exists but it's certainly not average.

[Mathguy]

Originally Posted by Liledgy

Ms, can you show some data that backs up your claim of 10k property taxes for a typical middle class homeowners? I know it exists but it's certainly not average.

Property taxes came out in conversation by accident this weekend around my visiting relative after I noted I had to pay $4500 to which they asked...."every 6 months?" and I said no...yearly. (My house is 3700 sq ft not counting finished basement.)

My relative that was in town was basically "dang" I pay 7k (west burbs) and my friend (geneva so definitely higher rent area) pays 12k.

They live in a tidy subdivision of homes <2500sq ft. off I-80 in the far west burbs.

Anecdotal information for sure but it was a conversation I had yesterday and they were stunned to hear I'm paying about 1.5% of what my home is worth in property taxes when they are paying closer to 3%.

[MSchemist80]

Originally Posted by Liledgy

Ms, can you show some data that backs up your claim of 10k property taxes for a typical middle class homeowners? I know it exists but it's certainly not average.

Compare your property tax rate (database) - Chicago Tribune do the math You own a $300k family home in Lake Co with an average of 3.3% property tax rate you are paying $9900, Suburban Cook average 3.4% $10,200, Kane 3.64% $10920, Mchenry 4.02% $12,060...

[IrishIllini]

Originally Posted by MSchemist80

Compare your property tax rate (database) - Chicago Tribune do the math You own a $300k family home in Lake Co with an average of 3.3% property tax rate you are paying $9900, Suburban Cook average 3.4% $10,200, Kane 3.64% $10920, Mchenry 4.02% $12,060...

A large chunk of your tax bill goes to your local school districts.

[MSchemist80]

Originally Posted by IrishIllini

A large chunk of your tax bill goes to your local school districts.

And a large chunk of that goes to pay for exorbitant pensions and overpaid administrators rather than educating our children. Not to mention a significant number of teachers who have no business teaching yet can't be easily fired. I will attest to that. I've had more than my share of teachers who were completely dysfunctional growing up. Don't get me wrong there were some teachers I greatly respected but many more to this day I have no respect for. However, given how high our teacher pay-scales are in much of the area compared to the COL here and pay-scales in other areas we should not have to put up with substandard teachers and admins.

[CGab]

Originally Posted by Liledgy

Ms, can you show some data that backs up your claim of 10k property taxes for a typical middle class homeowners? I know it exists but it's certainly not average.

This is VERY typical in the Western suburbs of Chicago!

We lived in the northern part of Plainfield (blocks from Naperville) in Will county. Are home was assessed at $375K and our property taxes were $10,500 this year and have consistently been over $9k for the past 10 years! Every home in our township had taxes over $8k! With the neighboring town of Naperville within blocks of our home, we had friends there who were paying between $13-$20k in annual property taxes! With NO relief in sight we moved to NW Indiana. My property taxes next year will be capped at 1% of my assessed property value by Indiana state law and no tax on food!

[CGab]

Originally Posted by MSchemist80

As opposed to here in Illinois where typical middle class homeowners are paying $10k bills in many areas (between 2.5-5% of the value). A cap would help everyone and stop local govt from seeing property taxes as an endless money tree. We badly need a proposition 13 or Indiana equivalent control to stop the Dummycraps from destroying home ownership in this state.

I don't see Illinois ever putting a cap on property taxes. Their too much in the hole to afford it, if anything they will have no choice but to continue to raise the property taxes, income taxes and everything else they can tax! That's why we moved out of Illinois this past summer after my husband and I lived in Illinois our whole lives. Illinois is just getting out of hand taxing the crap out of their residents!

[MSchemist80]

All I can do is declare the Democratic party to be electorally dead to me and watch anxiously to see what happens. If they try to pass huge tax increases without doing major cuts and consolidation of govt I will leave the state and I suspect a lot of the rest of my family and a lot of businesses will follow suit. I already shop in DuPage Co and online to stick it to Cook Co for their sales tax increase and now soda tax.