The prepared testimony below was delivered by ITEP Senior Analyst Brakeyshia Samms to the Evanston, Illinois Committee on Housing and Community Development on January 20, 2026. For more on property tax circuit breakers, check out our 2023 brief.
Members of the City Council’s Housing and Community Development Committee,
Thank you for the opportunity to speak with you today about property tax circuit breakers. My name is Brakeyshia Samms, and I am a senior analyst with the Institute on Taxation and Economic Policy, a nonprofit and nonpartisan research organization that focuses on local, state, and federal tax policy issues with an emphasis on revenue sustainability and tax equity. My testimony will cover how property tax circuit breakers can help with housing affordability. I will also explain how circuit breakers function, summarize major features of programs across the country, and outline important considerations for policymakers.
Circuit breaker credits are the most effective tool available to promote property tax affordability. These policies prevent a property tax “overload” by rebating back property taxes that go beyond a certain share of income. Put another way, this prevents family budgets from being eaten up by property taxes, because circuit breakers ensure that property taxes do not overtake their ability to afford other expenses like groceries, utilities, and car payments.
Currently, state and local governments use a wide array of property tax cuts such as homestead exemptions, tax rate caps, and limits on growth in assessed value. But no tax cut offers a more targeted solution to property tax affordability problems than circuit breaker credits. That’s why I am glad to hear you are considering adopting such a program for the Evanston community.
Other policies fall short on equity when compared to circuit breakers. Homestead exemptions, which exempt a certain portion of home value from tax, are less squarely focused on the issue of property tax affordability, since they usually provide benefits to all homeowners regardless of need. When the exemption is provided as a flat dollar amount, for example, homes worth $400,000 receive the same tax benefit as homes worth $40 million. Percentage-based exemptions are even less equitable, as high-value homes receive the largest benefits.
Capping growth in assessed value misses the mark by an even wider margin. These policies tend to favor wealthier people living in high-value homes that are appreciating quickly in value. Young families seeking to buy their first home fare particularly poorly under assessment caps because artificially holding down the property tax bills of long-time homeowners pushes more of the responsibility for funding local services onto new buyers.
Unlike tax caps or homestead exemptions, circuit breakers measure the affordability of property taxes relative to families’ ability to pay, thus making it a better option and a smart policy choice.
Because property taxes are based on home values rather than income, property taxes aregenerally disconnected from “ability to pay” considerations in a way that income taxes are not. This disconnect can create problems for families as their financial circumstances evolve. Someone who suddenly becomes unemployed, for example, will find that their property tax bill is unchanged even though their ability to pay it is greatly reduced.
People living in gentrifying areas—a disproportionate share of whom are Black or Hispanic—can also be harmed if their home value and property tax bill surges but their annual income does not keep pace.
Your constituents are people of color, low-income, low-wealth, among many other demographics, and a property tax circuit breaker provides a laser-focused solution to the ongoing problem of property tax affordability.
The most common form of help is a threshold-style circuit breaker. Under this approach, credits are calculated using a formula that compares property tax liability to income and offsets some or all the property tax that exceeds what is designated as unaffordable under the program.
The majority of states (29 plus D.C.) offer some kind of circuit breaker, though these policies vary widely in size and scope. Geographically speaking, Illinois is a bit of an outlier for not having a circuit breaker. Both Michigan and Minnesota, for example, have good policies on the books.
Michigan’s program is open to renters and available to households making under $60,000 with property values of $154,400 or less. Their maximum credit is $1,700. In Minnesota it too is available to renters, and homeowners are ineligible after income exceeds $142,490. Their maximum refund of $3,310. The size of the average credit in Minnesota was $1,129 in 2021, which was the latest data available. This could go a long way to helping families afford their property tax bill.
One clear benefit of Minnesota’s policy is that it transforms what would have been a steeply regressive residential property tax into a tax that’s somewhat closer to being flat throughout much of the income scale. This helps contribute to Minnesota ranking among the least regressive overall tax codes, according to our flagship Who Pays report.
Illinois has above-average taxes right now on working class people and a circuit breaker on the city-level is an efficient and targeted way to bring their tax liability down to a more mainstream level. On the whole, Illinois levies what’s commonly called an upside-down tax code. That means the less you make, the more you pay, relative to your income. In our most recent study on this topic, we found that Illinois ranks the 8th most regressive in the country. If that’s concerning you, as frankly I think it should be, a robust circuit breaker is one clear cut way to begin moving in a more positive direction for your constituents.
A circuit breaker is an effective tool to help working-class people afford to stay in their homes. This is a policy that directly speaks to the issues in your community and the concerns of your constituents. Implementing a circuit breaker is a straightforward way to ensure that property taxes are set at levels that Evanston’s families can afford.
Here’s a link to our full report on the topic. Feel free to reach out with questions any time. Thanks for your time today.
