Cook County's treasurer released a report documenting the scope of the property tax problem across the region. From 1995 through 2024, property taxes in Cook County increased by $6.8 billion, or 182 percent. School districts drove much of this increase, hiking property-tax levies by 189.4 percent during the same period—nearly double the rate of inflation.
The underlying cause, however, extends beyond local school spending decisions. Illinois currently provides only 27 percent of K-12 funding through state revenue, well below the national average of 45 percent. This funding gap forces schools to rely heavily on local property taxes, which now cover 62 percent of K-12 costs compared with the national average of just 42 percent. The state shortfall amounts to $3.2 billion less than what evidence suggests is necessary to provide every child a quality education.
This structural imbalance explains why schools have increased property taxes faster than inflation. If schools were adequately funded by the state, they could reasonably limit spending—and tax increases—to match inflation levels. Instead, the burden falls disproportionately on local taxpayers.
Illinois faces a deeper fiscal problem: a structural deficit in its General Fund. This occurs when tax-revenue growth consistently fails to cover the cost of maintaining the same level of public services from year to year, adjusted for inflation. Contrary to common assumptions, overspending is not the culprit. Real General Fund spending on services in the current fiscal year is 14.3 percent less than it was under Republican Governor George Ryan in fiscal year 2000.
The real problem lies in flawed tax policy. Illinois' primary revenue sources—income tax and sales tax—fail to align with where economic activity is concentrated. The state's income tax is hamstrung by a constitutional prohibition on graduated-rate structures. This constraint becomes increasingly problematic given that average incomes for the wealthiest 1 percent in Illinois have grown over 325 percent in real terms over four decades, while average incomes for everyone else grew just 30 percent. Without a constitutional amendment, the state could increase the flat income-tax rate while targeting relief to low- and middle-income families.
Illinois' sales tax presents another missed opportunity. It focuses mainly on goods rather than services, despite services being both the largest and fastest-growing segment of the state's economy. Expanding the sales-tax base to include consumer services—as Wisconsin and Iowa have done—would generate revenue that grows with economic activity over time.
Meaningful property-tax relief requires the state to assume primary financial responsibility for education funding. Achieving this depends on restructuring the state's tax system to generate sustainable new revenue aligned with where Illinois' economy is actually growing.
