CHICAGO, IL — Americans for Prosperity-Illinois (AFP-IL) has been a fierce advocate for Illinois taxpayers, and today, Deputy State Director Brian Costin penned an opinion piece in Crain’s Chicago Business warning of the pitfalls of the megaproject bill facing the state legislature.
In the piece, Costin asserts, “Illinois does not need a separate property tax code for the powerful. It needs uniformity, transparency, and equal treatment under the law.”
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Opinion: The megaproject bill is bad for homeowners and small biz | Crain’s Chicago Business
Illinois families already face the nation’s highest property taxes. Yet lawmakers are pushing a “megaproject” scheme to freeze property tax assessments for select billion-dollar developments at pre-construction levels, while shifting the massive revenue shortfall and long-term risk onto surrounding homeowners and small businesses.
Megaproject supporters call it “property tax certainty,” but the real question is: certainty for who?
Not for the average homeowner or small business.
For several years, Gov. Pritzker’s administration has advanced the megaproject tax framework built around negotiated “Payment in Lieu of Taxes” agreements that allow major developments to secure long-term, fixed property tax terms.
Under the proposal, HB 910 and a handful of other similar bills, qualifying developments exceeding $100 million in investment could receive a “Mega Project Assessment Freeze” at pre-construction land value for up to 45 years. In Arlington Heights, for a project anchored by a new stadium for the Chicago Bears, that would mean taxing roughly $200 million in land value rather than the projected $5 billion in buildout.
At the same time, the bill requires local governments to use the project’s full, unfrozen fair cash value when calculating levy limits and bonding capacity, allowing them to raise more revenue and take on more debt as if the property were fully taxable. In practice, that means treating the project like a $5 billion asset for taxing and borrowing purposes, while the developer pays no taxes on new construction and is taxed on only about 4% of the total value.
State and local officials aren’t talking about the real risks baked into this legislation. Here’s the truth: the so-called “property tax certainty” for megadevelopers is created by shifting both the tax burden and the financial risk onto surrounding homeowners and small businesses dollar-for-dollar. In a state that already has the highest property taxes in the country, that shift could be catastrophic for surrounding communities.
How big is the risk for taxpayers?
Using an estimated 7% effective commercial property tax rate, a $5 billion development would generate roughly $350 million in annual property taxes. If the assessment is frozen at $200 million, the developer’s bill drops to about $14 million per year. That leaves a gap of approximately $336 million annually.
Because local governments can count the full fair cash value for levy and bonding limits while the developer pays taxes on the frozen amount, that $336 million represents real exposure and risk. It creates the capacity to shift a massive share of the tax burden onto homeowners and businesses outside the megaproject district each year.
Consider Community Consolidated School District 15 in Palatine. The district’s Equalized Assessed Value is roughly $4.4 billion. Add a $5 billion megaproject and EAV could rise close to 90 percent just from new construction alone, expanding levy and bond limits even though the development remains under a freeze.
A $330,000 home that now pays about $3,700 each year to District 15, within a total property tax bill exceeding $10,000, could see that portion double as the levy expands under this structure. That means roughly another $3,700 annually for the same homeowner, before accounting for potential increases from the high school district, municipality, township, special-purpose districts, and the county.
History offers a cautionary example. In Harvey, Illinois, effective residential tax rates have ranged from 4 to 5 percent of market value, while commercial properties have faced rates approaching 20 percent. Those crushing burdens contributed to tax sales, foreclosures, shuttered businesses, and hollowed-out neighborhoods. When tax burdens detach from economic reality, communities deteriorate rapidly. The megaproject bill risks driving property taxes sharply higher in surrounding communities, pushing otherwise stable, economically healthy areas toward increasingly oppressive tax burdens. Over time, that kind of pressure can erode investment, strain homeowners and businesses, and put these communities on a path that looks more like Harvey or Detroit.
Illinois families already face five-figure property tax bills, yet not a single provision in this bill protects taxpayers outside megaproject districts from higher levies driven by this structure. There is no proposal to cap property taxes for surrounding homeowners or small businesses, no guardrails on levy growth tied to these projects, and no mechanism to prevent the shifting of costs onto those outside the district. The protections apply to the developer. The risk is borne by everyone else.
If enacted, developers receive decades of certainty, while surrounding homeowners and small businesses assume decades of risk. That is not economic development. It is a structural transfer of the tax burden.
After decades of failing to fix Illinois’ property tax problem, lawmakers now face a defining choice: stand with families already paying the highest property taxes in the nation, or side with billion-dollar developers seeking special treatment.
Illinois does not need a separate property tax code for the powerful. It needs uniformity, transparency, and equal treatment under the law. Policymakers should focus on broad-based property tax relief for homeowners and small businesses who already carry the heaviest burden. The choice is straightforward. Reject this megaproject scheme and stand with Illinois taxpayers.
Brian Costin is Deputy State Director for Americans for Prosperity-Illinois
