Although the Harveys of the 1950s and 1960s are gone, and boarded-up homes and empty storefronts silence the city, Harvey residents are still being hit with a hefty bill.
According to an analysis by the Chicago Tribune, as of 2015, effective residential property tax rates in Harvey were approaching 6 percent of home values, while the effective rate for businesses was over 14 percent. All told, home values in Harvey fell by nearly 60 percent from 2007 to 2015.
While property taxes are strangling residents, the question Jones asks doesn’t require a good answer. Over the past few decades, as Harvey’s population has dwindled and the remaining residents have had to pay the bills, few have chosen to set up shop in the city in part because of the fear of that bill – in addition to corruption and uncertainty.
Clark sees burdensome property taxes – among the highest in the state – as a justifiable major source of frustration for the city when residents don’t see improvements in services or quality of life.
Much like the pension crisis, other municipalities are a few steps away from being in the same situation as Harvey.
Communities in the central part of the state, such as Danville, East St. Louis, Kankakee, and Granite City, have firefighter pension funds that are less than 30 percent funded and police pension funds that are less than 40 percent funded. Alton is also in the same boat, with a firefighter pension fund that is about 30 percent funded and a police pension fund that is less than 40 percent funded.
In 2017, Danville passed a property tax increase to pay for its effectively bankrupt pension fund. Local property owners in the struggling city now face a special annual assessment of up to $1,020 just to pay for pensions. In 2018, Kankakee decided to raise sales taxes, with the additional revenue going entirely to local pension funds. In Alton, officials are moving forward with a plan to sell the city’s water treatment plant to cover an upcoming $8 million police and fire pension.
But ultimately, hundreds of millions of dollars in additional taxpayer contributions across Illinois have been unable to keep up with the rapid growth in pension benefits, which are mandated by the state, not local governments.
Between 2008 and 2015, Illinois residents saw their property taxes grow six times faster than household income. And state data shows that as of 2016, Illinois home prices are still down 10 percent from 2006. The phenomenon of rising property taxes without new or better services – and the resulting hit to home equity – is by no means limited to the south suburbs.
While other cities are following the same path, the property tax burden in Harvey has already reached a completely unmanageable point for many homeowners.
Not only are more and more vacant or burned-out homes popping up left and right – as many as 20 percent of the city’s 12,000 homes are abandoned – but current property owners can also have their tax bills rejected. More than 4,000 property tax bills in Harvey remained unpaid at the beginning of 2018, the highest number of any municipality.
The government should have enacted reforms to meet the shrinking tax base, but it did not. The Harvey Public Library District, which issued $6 million in bonds in 2015 to pay for an expansion of the facility, has found itself unable to keep up with its bills due to declining property tax revenues.