The Illinois State Legislature has a Bill pending to increase the state portion (county is $0.50 per $1,000) of the real estate transfer tax from $1.00 per $1,000 to $3.00 per $1000 of sale price for properties in the $500,000 to $1,000,000 price range and $7.00 per $1,000 in the $1,000,000 to $3,000,000 range. That does not affect a lot of people; however, tweaking the law is not to difficult once passed.
A bill has already been passed that ads $10 to the fee for recording a mortgage. Wasn't it Everett Dirkson (they named the Federal Building in Chicago after him) that once said, "A billion here, a billion there and soon you start talking about some real money."
Affordable housing, open space, and natural areas programs have already received a HUGE increase in tax revenues in recent years as housing prices and market volume have increased. In just the last 3 fiscal years alone (FY04, FY05, FY06), transfer tax revenues to the state have grown by 63%. To put this in perspective, using FY03 as a base year, these programs have garnered over $80 million in NEW money, over and above an annual base of $71 million starting with FY03. Yet, this legislation proposes to increase revenues by another $99 million annually!
In addition, the state just passed a fee increase in FY06 (SB 75, P.A. 94-118), which imposed a $10 surcharge on recording mortgage documents, which will raise another estimated $30 million annually to be used for affordable housing programs (in addition to the revenue growth cited above).
The funds that are earmarked to receive these new monies have been repeatedly "raided" over the past 3 years, and the money this tax increase generates may well just be swept into the General Revenue Fund.
Nearly $15 million has been swept from the Affordable Housing Trust Fund ($4 million FY07, $6 million FY06, $5 million FY05);
Nearly $18 million has been swept from the Open Space fund ($10.5 million FY07, $3.2 million FY06, $4.3 million FY05);
Over $8 million has been swept from the Natural Areas fund ($5 million FY07, $1.4 million FY06, $2 million FY05).
That's $41 million in monies swept from these funds - why increase taxes on homeowners, farms, and businesses, only to have the funds swept again?
WHY increase the transfer tax when natural revenue growth and recently increased fees have already provided substantial revenue growth for these programs, especially in a budgetary environment where it is very likely that all or some of the funds generated will be redirected for general revenue purposes.
If you are so inclined, you may want to verse your opinion with your state legislature representative.
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