TAXING QUESTIONS

Taxpayers, take note. In Illinois, caps of tax increases are being contested in court. Guess who is challenging the limit on annual tax increase? Why, it is a group of taxpayers. Apparently they think it is OK to raise taxes by leaps and bounds year after year.

Not likely.

The fact of the matter is that in 1991 the Illinois Legislature capped tax increases in five Chicago-area counties to 5 percent a year or the rate of inflation, whichever is lower. Inflation has been lower, which means a lot of taxing entities have been unable to grab more tax dollars.

As a matter of fact, a lawsuit has been filed to challenge the caps. Plaintiffs in the suit include taxpayers who contend they want the right to pay taxes that are increasing faster than the rate of inflation. An appeals court has recently ruled that the plaintiffs are entitled to pursue the case, even though a lower state court originally threw it out.

Now Gov. Jim Edgar has signed new legislation that would extend the tax caps to the other 96 counties in Illinois, provided voters approve a referendum to that effect. Already, there is stiff opposition being organized in hopes that no county well ever get to vote on limiting tax increases. That opposition is generally led by school districts.

This is a fine dilemma for taxpayers in Illinois. Generally, limiting taxes is regarded as a good idea by those who have to foot the bill. But, given the opportunity to control tax increases to some extent, at least some taxpayers can be cajoled into joining a lawsuit against such caps.

It is a sad fact, in the first place, that taxpayers must resort to caps and other limiting legislation to keep government from spending and then spending some more. It is an even sadder fact that government rarely looks to the most obvious remedy: less spending.

Instead of finding ways to economize and hold spending down, local governments in Illinois are preparing for battle to have the rights to raise taxes as much as they want.

For Illinois taxpayers, it must be more than a little confusing. What the legislators giveth, local government seeks to take away.

The outcome of the legal battles in Illinois will be closely watched by taxpayers who might want similar county-by-county limits in their own states.