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Instant Poll

SAFETEA-LU, the federal surface transportation bill, authorized several northeastern Illinois projects. In addition to CREATE, the historic freight rail initiative, which projects should the state prioritize?

		Extension of the CTA Red Line to 130th St. and Stony Island Ave.

		Construction of the O'Hare Bypass, extending the Elgin-O'Hare Expressway.

		Development of the Metra's STAR Line to serve suburb-to-suburb commuters.

		Construction of a higher-speed transit link to O'Hare, with flight check-in downtown.

		Not so fast ... no projects should be prioritized before our region adopts a plan for coordinated growth and investment.



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Tax Policy: The Rules of the Regional Development Game

CONTENTS

Impact of Tax Structure on Regional Demographic Trends

Impact of Tax Structure on Regional Development

Summary

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Scott Goldstein
Vice President of Policy and Planning

Tax Policy:
The Rules of the Regional Development Game

May, 2000

The Metropolitan Planning Council (MPC) released a study in May 1995, co-sponsored with the Federal Reserve Bank of Chicago, analyzing the effects of commercial and industrial growth on local property taxes in the six-county Chicago region.* Key findings include:

Business growth was associated with lower residential property tax rates than otherwise would have occurred. Communities seek business growth to bolster their own fiscal resources. However, unintended consequences may follow.
Population growth generally was associated with increased residential tax burden. Residential development can increase the tax burden by raising demand for services such as schools.
Because people tend to follow jobs, with business growth encouraging population growth in a cluster of communities, economic development in one community may create higher tax rates for nearby communities, which do not receive the tax benefits of the business growth.
Property taxes have long been a contentious issue in Illinois. In recent years the Illinois legislature has responded by placing tax caps on many local governments and by enacting other measures such as a freeze on property assessments for senior citizens.
MPC suggests that an effective legislative response to property tax issues should reflect a broad understanding of the underlying impact of property taxes on planning and development in the region.

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