How Property Taxes in Central Illinois Are Impacting Wealth

Across Central Illinois, rising property taxes are becoming more than a budget concern — they could be a serious threat to long-term wealth. Homeowners are watching their equity growth stall and their financial plans tighten, as property taxes outpace incomes and home values in many communities.

Property Taxes Far Outpacing Income Growth

Illinois consistently ranks among the states with the highest property taxes. Homeowners in the state pay an average of $6,285 per year, more than twice the national average of $2,969, according to Municipal Observer (2025)?.

Between 2000 and 2017, Illinois property taxes increased by 105%, while median household income rose only 34%, according to Wirepoints?. In effect, property taxes have outstripped residents' ability to keep up — and Central Illinois has not been spared.

Eroding Home Equity and Wealth

High property taxes can diminish the wealth-building potential of homeownership.

Moreover, a significant portion of property tax revenue is being diverted to pension obligations. In many communities, over 50% of property tax increases go toward underfunded public pensions — not infrastructure, schools, or services that would enhance property values3.

This creates a vicious cycle: homeowners pay more, but see little return. Meanwhile, the suppressed appreciation of home values reduces the long-term gains traditionally associated with owning a home.

Long-Term Risks for Families

Rising property taxes in Central Illinois can present several risks to long-term household wealth:

· Reduced savings capacity: As taxes rise, families have less to save for retirement, emergencies, or education.

· Limited housing returns: High taxes can stagnate or even reverse home value appreciation.

· Increased foreclosure and lien risk: If taxes go unpaid, counties can sell liens to private investors, resulting in forced home sales and loss of equity4.

· Outmigration and demand decline: Illinois lost over 87,000 residents in 2022, taking nearly $10 billion in income with them — driven in part by the rising cost of homeownership5.

The Bigger Picture

I believe Central Illinois families have long seen their homes as a key to financial security. But unchecked property tax growth is challenging that foundation. While assessments may be justified by rising market values, the failure to control tax rates or reform pension liabilities may leave many homeowners trapped — equity-rich on paper but cash-poor in reality.

Without policy reform to address pension debt, improve spending efficiency, and relieve the local tax burden, the wealth-building potential of homeownership may continue to shrink.