By Tara Malone
Daily Herald Staff Writer

Posted Wednesday, October 18, 2006

Candidates for Cook County assessor want to do more than calculate your property tax bill.

They want to change the math.

Democratic incumbent James Houlihan and GOP challenger Ralph Conner hope to overhaul Illinois’ property-based tax system. They offer different plans for reform.

Houlihan, 63, of Chicago says the state should level its financial reliance between the three largest streams of tax money: income, real estate and sales.

Illinois leans too heavily on property tax dollars, he contends. Caps on how much real estate bills can climb in a year sustain the current property-based tax system. But an underlying fracture remains, Houlihan says.

He would know. Now seeking a third term as county assessor, Houlihan has determined taxes on homes across Chicago and the suburbs for nine years.

“You’ve got burdens that are not equivalent,” Houlihan said during a recent meeting with the Daily Herald editorial board. “The system as it is doesn’t collect fairly and that has to be changed even if we raise no additional money.”

Houlihan suggests expanding the sales tax to include services on things like haircuts or creating a gross receipts tax, where a business is taxed for all goods sold and services rendered within a specified time period.

Conner, 58, echoes the need for a more equitable tax system. The former Maywood mayor offers a different vision of how to do it.

“We are taxing everything when we should try to simplify it and go with a system that is fair,” Conner said.

Conner rejects a shift to an income-based tax, dismissing the move as a “shell game.” He pushes a broader sales tax and a new calculation to determine property assessments, one that would bring Cook County in line with other counties in Illinois that assess residential and commercial property at the same rate.

Among Illinois’ 102 counties, Cook County is unique. Residential lots are assessed at 16 percent of their value while business properties are assessed at 33 percent. Elsewhere in the state, a single rate is applied.

The state’s most vocal tax reform champions are school advocates, who cite Illinois’ ranking as one of the worst in the nation when it comes to fairly funding public schools.

On average, school districts draw 60 percent of their money from local sources like property taxes. That cripples districts in low-income areas, where property taxes yield a limited pool of money.

Many solutions have been vetted; none have been implemented.

The Mayors Metropolitan Caucus supports boosting to 51 percent the state’s financial contribution to schools, up from about 33 percent now.

The Center for Tax and Budget Accountability, meanwhile, would boost the personal income tax rate and broaden sales taxes to include services, an economic sector not now taxed.

To be clear, whoever wins election next month as Cook County assessor will not determine the future of Illinois’ tax system. But they will be in a position to shape the discussion.

“I’m not in a position to move it forward other than setting the table,” Houlihan said.

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