CIVIC FEDERATION CONTACT: [email protected]
MANSUETO INSTITUTE FOR URBAN INNOVATION CONTACT: Tyler McGaughey, [email protected]
Civic Federation and Mansueto Institute report reveals exclusions and loopholes in PTELL allow billions in extra tax collections in Cook County
CHICAGO — A new report by the Civic Federation and the Mansueto Institute for Urban Innovation at the University of Chicago reveals that a state law designed to limit property tax growth has not worked as intended — leaving many taxpayers facing steadily rising bills despite supposed protections.
Enacted in the 1990s, the Property Tax Extension Limitation Law (PTELL) was designed to limit the annual growth in property tax extensions for non-home rule governments, such as school districts and park districts, to the lesser of 5% or the rate of inflation. However, in practice, property taxes in Cook County have grown far faster than inflation. The report finds that the law’s numerous exclusions and exceptions have rendered its limits ineffective.
“The common line is that PTELL limits property tax increases for non-home rule governments by the rate of inflation,” said Chris Berry, Director of the Mansueto Institute for Urban Innovation. “What we found through the data is that governments’ property tax extensions—the amount billed and collected from taxpayers—have increased by far more than inflation because of the exceptions and carveouts that make the PTELL cap largely meaningless.”
“After a long delay in the issuance of property tax bills, on November 15 taxpayers will find out just how much their bills are rising and it’s important for them to understand that a major driver of tax increases is increasing amounts of revenue that governments collect through their extensions,” said Joe Ferguson, President of the Civic Federation. “PTELL was supposed to protect taxpayers from unchecked property tax increases, but instead, the law gives the appearance of a cap while failing to achieve its purpose of slowing property tax growth.”
Key Findings
While inflation rose by 46% between tax years 2006 and 2023, the total amount of property taxes billed to taxpayers by taxing agencies subject to PTELL in Cook County increased by 71% over that same period. Had PTELL strictly limited property tax extensions to the rate of inflation, Cook County taxpayers collectively would have paid more than $1 billion less in property taxes ($11.3 billion instead of $12.6 billion in tax year 2023, payable in 2024). Chicago-based taxpayers accounted for $550 million of that $1 billion.
Not all governments subject to PTELL have exceeded inflationary growth—such as the Chicago Park District—and some jurisdictions not subject to PTELL, including Cook County government, have kept their tax extensions below inflation. But overall, PTELL’s numerous exclusions have undermined its purpose.
Chicago Public Schools serves as a prime example of a large non-home rule government that has increased its property tax extension by far greater than the PTELL limit. CPS’ total property tax extension more than doubled from 2006 to 2023. This was mostly driven by the establishment of a special property tax levy in 2016 dedicated to teacher pensions, which is exempt from PTELL.
Why PTELL Doesn’t Actually Limit Property Taxes
The report identifies several mechanisms that allow local governments to increase property tax collections beyond the inflation-based limit, including:
Uncapped funds: Certain levies—such as those for debt service, bonds, or pensions—are exempt from PTELL limits.
New or improved property: Property value from new construction, annexed or formerly exempt parcels, and expiring TIF districts and other expiring incentives, are excluded from the calculation of the cap used to limit annual tax rate growth.
Recapture levy: A 2021 law permits taxing districts to recover refunds from prior-year tax appeals outside the PTELL limit.
TIF surplus distributions: Excess funds from Tax Increment Financing districts are shared with taxing bodies, and this revenue is not subject to PTELL.
Voter-approved referenda: Jurisdictions can exceed PTELL caps with voter approval, most commonly in suburban areas.
Because of these exceptions, even governments subject to PTELL can grow their total property tax extensions well beyond inflation.
“Taxpayers, from whom much is already asked by governments, deserve transparency and a comprehensive accounting of how property tax laws actually work,” said Ferguson. “We hope these findings help lawmakers, local officials, and residents engage in a data-driven conversation about meaningful reform.”