Illinois Senate passes Privilege Tax on investors

[jsglow]

Eng, are your folks in Cook County?

[MU82]

They are both fully retired, but their main concern is the house values because shockingly no one seems to want to move INTO Illinois I think I need to sit down with them at some point and walk through the logic of it because I don't why they are holding on. They've been in the house for 20 years, they are going to get more than they owe, so who knows.

One other thing they probably like is that SS benefits are not taxed by Illinois. I learned this the last couple of years when I started filing taxes for my 91-year-old father-in-law. The difference in state taxation of SS benefits in Ill vs. NC is several thousands of dollars a year. I don't know what Wisconsin's laws are re taxing SS benefits. Might not be the reason they are reluctant to leave Ill at all, but it is one benefit for retired folks there.

On a personal level, my son still lives in Chicago and he is getting married to a Highland Park girl next year. She is a teacher. I do worry a little about their financial future.

In any decent to good area of Chicago, at least, I have not seen a reduction in property values. In fact, the opposite is true. Rents also are up, up, up.

[Chili]

Couple of examples from my family (parents live in Illinois and my brother is a teach in Illinois though lives in Wisconsin)

-People don't want to move into the $hit$how that is Illinois and as a consequence home values amongst other things are going down.
-With an improving economy the purchasing power of Illinois residents is going down because more of their revenue is going to taxes at the city, county, and state level.
-My brother, as a teacher in Illinois, has no access to social security for retirement per the way Illinois has built it's public employee retirement plan. However the retirement plan is unfunded to the tune of billions of dollars meaning his retirement is in significant jeopardy.

I recognize these are anecdotal but I don't think they are too far outside the norm.

Not true. My wife and I just made a 22% return in 2 years on our condo as we saw now is the right time to build a house in the city if you want to try and do it for under a Million. If you're in the right places you're fine but if you're buying in places people don't want to live - well you made a bad investment. Right now in Chicago demand is FAR FAR FAR outweighing supply.

[mu03eng]

Eng, are your folks in Cook County?

McHenry

[mu03eng]

Not true. My wife and I just made a 22% return in 2 years on our condo as we saw now is the right time to build a house in the city if you want to try and do it for under a Million. If you're in the right places you're fine but if you're buying in places people don't want to live - well you made a bad investment. Right now in Chicago demand is FAR FAR FAR outweighing supply.

Very interesting, my parents keep telling me the market is terrible for them and I was going off of that. I need to do a Zillow search in their area (Crystal Lake-ish) to see what the market for them really looks like.

[MU Fan in Connecticut]

Those types of places are nice if you have a job and an income.  However Texas, South Carolina and Arizona are ranked 38th, 40th and 42nd when it comes to percentage of households with incomes under the poverty rate.

I heard a quote from Myrtle Beach, that if you move there you better bring your money with you.

[rocket surgeon]

Those types of places are nice if you have a job and an income.  However Texas, South Carolina and Arizona are ranked 38th, 40th and 42nd when it comes to percentage of households with incomes under the poverty rate.

chicken and the egg.  i would venture to guess that people are moving to florida, texas, north dakota, etc because of the jobs.  add in quality of life and taxes and ya got yourself the triple no brainer.  i can imagine the poverty rates in arizona are not helped by the large native american populations.  texas-high percentage of immigrants, south carolina? 

maricopa county grew by over 200 people per day thru 2016.  bullseye, az. was the fastest growing city in the u.s.  i know surprise, az grew by over 100,000 over the last 10 years. 

[MU Fan in Connecticut]

Not true. My wife and I just made a 22% return in 2 years on our condo as we saw now is the right time to build a house in the city if you want to try and do it for under a Million. If you're in the right places you're fine but if you're buying in places people don't want to live - well you made a bad investment. Right now in Chicago demand is FAR FAR FAR outweighing supply.

House Hunters on HGTV always seems to have a new episode in Chicago.

[MUBurrow]

Not true. My wife and I just made a 22% return in 2 years on our condo as we saw now is the right time to build a house in the city if you want to try and do it for under a Million. If you're in the right places you're fine but if you're buying in places people don't want to live - well you made a bad investment. Right now in Chicago demand is FAR FAR FAR outweighing supply.

Very interesting, my parents keep telling me the market is terrible for them and I was going off of that. I need to do a Zillow search in their area (Crystal Lake-ish) to see what the market for them really looks like.

Is this a suburb vs city issue? Not to get all generational, but it would stand to reason that as folks born in the 80s represent a larger proportion of property buyers, those folks are less inclined to purchase single family, .25-.5 acre spots in the suburbs vs finding ways (renos, townhouses, flats, etc) to stay in the city. I don't have anything to bear this out other than narrative experience, but it seems that whereas boomers and older Gen Xers moved out to the burbs before their first baby turned 1, the next wave of property buyers are more inclined to really want to make the city work.

[mu03eng]

Is this a suburb vs city issue? Not to get all generational, but it would stand to reason that as folks born in the 80s represent a larger proportion of property buyers, those folks are less inclined to purchase single family, .25-.5 acre spots in the suburbs vs finding ways (renos, townhouses, flats, etc) to stay in the city. I don't have anything to bear this out other than narrative experience, but it seems that whereas boomers and older Gen Xers moved out to the burbs before their first baby turned 1, the next wave of property buyers are more inclined to really want to make the city work.

I think this is absolutely part of it. My parents live in a far suburb of Chicago (70 minutes by Metra to Olglivie) and I'm there are almost no millineals that want to move out there.

[jsglow]

I think this is absolutely part of it. My parents live in a far suburb of Chicago (70 minutes by Metra to Olglivie) and I'm there are almost no millineals that want to move out there.

Certainly not as hot.  But at the same time probably didn't hit the bottom so bad 5-6 years ago. I just zillowed our house.  Up 5.3% last 12 months.  Market listed as Very Hot.  We live in DuPage.

[DegenerateDish]

Question for the flatlanders -  What are the specific issues you've personally dealt with during the past couple years of not having a state budget?   Minus the obvious late-payment issues to vendors, I'd be curious what impact it has on daily life ..

.. and what impact a possible bankruptcy would have on citizens.

mu03eng, what "things are getting worse" for you, what do you expect to be less "manageable" in the future, that you'd find Wisconsin to be better?

My wife works for a state college, is in charge of a woman's program. If it wasn't for grant money, she'd have had no program to run these last few years.

[Chili]

Is this a suburb vs city issue? Not to get all generational, but it would stand to reason that as folks born in the 80s represent a larger proportion of property buyers, those folks are less inclined to purchase single family, .25-.5 acre spots in the suburbs vs finding ways (renos, townhouses, flats, etc) to stay in the city. I don't have anything to bear this out other than narrative experience, but it seems that whereas boomers and older Gen Xers moved out to the burbs before their first baby turned 1, the next wave of property buyers are more inclined to really want to make the city work.

Our condo was in Logan Square and our new house will be in Avondale. So yes, I think it's all about being in the right area and viewing housing as much as an investment as a place for your family.

[GB Warrior]

My wife works for a state college, is in charge of a woman's program. If it wasn't for grant money, she'd have had no program to run these last few years.

While the federal government is doing its best to obliterate grant funding too.

[mu03eng]

Does anyone know where one could find a summary of the total debt owed at all levels of government (city, county, State, Federal).

[jsglow]

Does anyone know where one could find a summary of the total debt owed at all levels of government (city, county, State, Federal).

[dgies9156]

It's Illinois. Our legislature has passed things far more stupid than this.

By the way, any of y'all want to buy my house?

You got that one right.

Am now carrying a Florida Drivers License and am registered to vote in the Great State of Florida.

[jficke13]

You got that one right.

Am now carrying a Florida Drivers License and am registered to vote in the Great State of Florida.

one of my law professors at MU maintained Florida citizenship, although I think that had more to do with no Florida state income tax (at least that's what he said).

[forgetful]

one of my law professors at MU maintained Florida citizenship, although I think that had more to do with no Florida state income tax (at least that's what he said).

It would be Florida residency.  Which is impossible if he works and spends most of his time in Wisconsin.  My guess is your law professor was violating the law and lying on his taxes. 

[forgetful]

chicken and the egg.  i would venture to guess that people are moving to florida, texas, north dakota, etc because of the jobs.  add in quality of life and taxes and ya got yourself the triple no brainer.  i can imagine the poverty rates in arizona are not helped by the large native american populations.  texas-high percentage of immigrants, south carolina? 

maricopa county grew by over 200 people per day thru 2016.  bullseye, az. was the fastest growing city in the u.s.  i know surprise, az grew by over 100,000 over the last 10 years.

It's a complicated issue.  For a long time (at least in TX), all job growth was essentially minimum wage jobs.  They have since lobbied to get major corporations to relocate to TX.  They do so by: 1) advertising the low wages in the state.  2) Granting them enormous tax credits where they will pay no corporate taxes nor property taxes for 10+ years. 

They do then get these new jobs (better paying), but they have to build immense infrastructure to support the new companies and growth.  They achieve that by jacking up property taxes 10%+ per year (under the guise of increased home valuations) and massive deficit spending that has bankrupt cities like Dallas. 

All the new investment in these growth areas, is great...high paying jobs, nice areas, but because they have to devote all tax dollars to these corporate areas, the communities suffer, making poorer communities much much worse and exacerbating an already terrible poverty rate. 

Bottom line is everything comes at a cost.  It's up to each and everyone of us to determine if that cost is worth it...and that is where disagreements usually lie. 

[🏀]

McHenry

Holler.

[DegenerateDish]

The hardest part about living in Illinois is there's zero light at the end of the tunnel. Hilltopper asked what the day to day hard parts are, and (there's way more intelligent people on this than myself on this board) one of the biggest issues is the Illinois property tax formula for education. Our school district's property tax percentage was supposed to actually go down this year (a bond was paid off), and instead that portion of my tax bill went up 10%. The value of my home was flat YoY. Not a day to day issue per se, but for the first time in forever, I went to School Board Meet the Candidate meetings, and am trying to be active where I can on a daily basis to inform myself about who I'm electing, and how it hits my pocketbook.

[jficke13]

It would be Florida residency.  Which is impossible if he works and spends most of his time in Wisconsin.  My guess is your law professor was violating the law and lying on his taxes.

Consider me properly chastened for using the wrong word on a forum.

I can't imagine why he would tell a room full of law students that he was maintaining fraudulent *residency.* What could he possibly have to gain from doing so?

More germane to the discussion at hand though, people do make *residency* decisions based on tax policies. The kinds of people who are sophisticated and wealthy enough to do so are the kinds of people who will be targeted by the "privilege tax."

[drewm88]

Question for the flatlanders -  What are the specific issues you've personally dealt with during the past couple years of not having a state budget?   Minus the obvious late-payment issues to vendors, I'd be curious what impact it has on daily life ..

.. and what impact a possible bankruptcy would have on citizens.

mu03eng, what "things are getting worse" for you, what do you expect to be less "manageable" in the future, that you'd find Wisconsin to be better?

I work with a lot of social service non-profits, and many of them have been feeling the hurt. Lots of reduced services, lots of layoffs. Really awful from our legislators.

Personally, our neighborhood in Chicago (Lakeview) continues to slowly climb with property values. I'm not too concerned for my home value.

[drewm88]

Our condo was in Logan Square and our new house will be in Avondale. So yes, I think it's all about being in the right area and viewing housing as much as an investment as a place for your family.

Good call. Avondale seems poised for a boom in a few years.