HB 4058: Illinois’ New Megaproject Bill and How It Could Affect Everyday Taxpayers

O'Connor discusses House Bill 4058, Illinois’ new megaproject bill and how it could affect everyday taxpayers.

CHICAGO, IL, UNITED STATES, November 26, 2025 /EINPresswire.com/ --


Big developers could soon get decades-long property tax breaks while property owners' tax bills keep rising. Illinois’ new “megaproject” law, House Bill 4058 (HB 4058), promises jobs and investment, but could also reshape who pays the biggest share of local taxes. The house bill is drawing significant attention due to its large potential tax breaks for developers and big projects such as stadiums or corporate campuses. While some of Illinois’ biggest developments may benefit from a major tax advantage, homeowners and small businesses may face steady tax bills in the upcoming year due to shifting the local tax burden.

What is House Bill 4058?

HB 4058 is pending before the House Rules Committee and was proposed by the Illinois Department of Commerce and Economic Opportunity (DCEO). The bill would provide major tax breaks or exemptions for megaprojects (large-scale investments meeting certain job-creation and investment thresholds) by reducing the qualifying threshold from $500 million to $100 million, and freezing property taxes at pre-development levels for 23 to 40 years. Essentially the bill would encourage megaprojects by offering substantial tax and assessment incentives. This bill would require the company operating the megaproject to enter into an agreement with the municipality and local taxing districts regarding “special payments” rather than standard taxes or normal property tax assessments. Payments in Lieu of taxes (PILOTs) or negotiated payments, are payments made to a local government to make up for property tax money they lose when a property is tax-exempt.

Inside the Megaproject Incentives

The Chicago Bears are among the major developers positioning themselves to take advantage of the proposed legislation. The team’s planned stadium project in suburban Arlington Heights could yield significant property tax savings if the bill passes. However, the project remains contingent on several factors, including state and local approvals and the outcome of HB 4058. Implicitly, local governments seeking to attract large-scale investment would arguably support such incentives, and large developers/major projects would benefit from this kind of legislation. These kinds of large-scale projects could compete with neighboring states for high-value development, stimulate local economies and infrastructure growth, and create construction and long-term employment opportunities.

Potential Concerns & Benefits

Not everyone in Illinois has responded to the bill with open arms. Many homeowners, small business owners, and tax equity advocates are skeptical, arguing that the bill could shift the tax burden from large projects onto residents. Brian Costin, deputy state director at Americans for Prosperity Illinois, has voiced that this is simply a “tax hike” from Illinois Governor Jay Robert “JB” Pritzker. Costin believes the governor is “trying to raise property taxes on the regular folks of Illinois to reward millionaires and billionaires.” Costin has voiced his concern that the bill would let developers take advantage of the incentives, while everyday homeowners and small businesses would end up paying more in taxes to cover the difference.

Further, critics argue the bill would technically allow megaprojects to underdeliver on promised jobs and community benefits and create greater inequalities between major developers and everyday taxpayers. Many argue that incentives create special deals for large companies, unfairly advantaging them compared to small business or residential taxpayers. The bill may affect local governments, particularly smaller taxing bodies, by reducing expected revenue and requiring them to negotiate complex PILOT agreements that limit transparency. To top it off, many may find that the “freeze” may last a long time, and the benefits don’t sufficiently accrue to the broader community.

Supporters of the bill, including large developers, megaproject firms, and local governments, stand to gain from reduced costs, stronger returns, and increased job opportunities. Lower tax burdens could make Illinois more attractive for major real estate investments and encourage developers to locate or expand projects in the state. With strategic planning, local governments could help economic activity by creating job opportunities, expanding the tax base, and supporting related growth in areas such as retail, housing, etc.

Changing the Playing Field: Developers vs Property Owners

The bill would provide developers and large-scale projects with significant tax advantages, including exemptions from retailers’ occupation taxes on building materials and property tax assessment relief, which would effectively cut construction expenses and ongoing operating costs. As mentioned previously, they would also benefit from a streamlined megaproject certification path (via DCEO) and negotiate payment agreements rather than full property tax treatment. Compared to other states, the incentives can make a large investment more economically feasible or attractive by reducing upfront and ongoing tax burdens.

For everyday taxpayers, they may not directly get the same incentives. Unfortunately, typical homeowners or small business properties will not qualify as megaprojects under the bill’s definitions. This would mean that they would not be able to access the freeze/exemption. Since large projects get tax relief, there is a possibility that the tax burden shifts or local taxing districts get less revenue from those large projects and may attempt to recoup through increased rates or fewer resources for services that benefit homeowners or small business owners. However, small businesses may still compete for land or space adjacent to these large projects, but they don’t get the same property tax relief.

The bill essentially tilts the playing field in favor of large-scale developers who can meet the threshold rather than smaller business owners. The special payments (PILOTs) negotiated might mitigate local concern, but the standard tax advantages are skewed toward the big projects.

What It Means for Illinois Communities Long-Term

Tax Equity
There are many long-term impacts due to the house bill including tax equity, local development, and job growth. Concerning tax equity, since the law creates special tax treatment for large megaprojects, there is a risk of unequal tax treatment because while big projects get favorable terms, others do not. Over time, this could skew the perception of fairness. For example, local taxing districts may end up with less growth in the property tax base from megaprojects, and this might raise rates on other parcels or reduce service levels. As a result, this could shift the burden onto homeowners and small businesses. However, all is not lost, there is one contingency. If the megaproject drives new economic activity as in more businesses and residents, then the overall tax base might expand, potentially easing burdens for all.

Community Implications
Concerning local development or community implications, a megaproject may serve as an anchor or foundation to encourage additional private investment in surrounding neighborhoods. This in turn would increase property values and revitalize under-invested areas. But there could also be displacement risks because as property values rise near a big project, homeowners or small businesses could face higher costs or gentrification pressure. The benefit to the broader community is highly dependent on how the development is planned and managed. Long-term, if many projects take advantage of the assessment freeze, it could reduce the tax growth of an area. This could limit infrastructure investment unless it is offset by other revenue sources.

Economic Development
If the bill attracts large investments, then communities could see job creation, increased local spending, new infrastructure, and business growth such as hospitality and retail. However, there is a risk that the jobs promised are not as many or not as local (machinery or outside workers) and that the incentive costs could outweigh the benefits in some cases. One solution is for local bodies to negotiate an agreement that includes workforce commitments or special payments to help ensure community benefit. If megaprojects deliver on job growth, communities could win. If not, local taxpayers might pay the price.

Real Change or Just Another Tax Break?

Would HB 4058 create real opportunity or is it just another incentive that benefits a few? This law would enact real change because of the kinds of tax exemptions and assessment freezes it would provide. The tax exemption and assessment freeze would be substantial and would materially affect the economies of large-scale developments in Illinois. The bill would greatly change how large developments are financed and taxed.

Some factors that could determine real change include:

The terms of the agreement between the developer and the local taxing bodies, such as the special payments required, affordability, workforce/local hiring, etc.
How much the tax breaks create new economic growth versus just shifting taxes around or reducing the money local governments would have otherwise collected.
How many projects meet the bill’s requirements to count as megaprojects, like minimum investment size or number of jobs created.
A tax freeze can encourage quick investment, but it also stops property taxes from increasing for many years and this could hurt long-term local tax revenue.

Whether HB 4058 leads to positive or equitable outcomes will depend largely on how it is implemented and whether its promised benefits are realized. The bill has the potential to drive real change, particularly in how large developments are financed and taxed. However, its advantages are likely to favor major projects and developers. The extent to which communities benefit will depend on local negotiations and follow-through.

HB 4058 could spark a wave of investment or deepen Illinois’ tax divide. Whether it works will depend on how cities negotiate, how transparent deals remain, and whether communities truly share in the benefits. HB 4058 could bring transformative projects to Illinois or tip the scales even further toward developers. The outcome will depend on how responsibly these incentives are used.

About O'Connor:
O’Connor is one of the largest property tax consulting firms, representing 185,000 clients in 49 states and Canada, handling about 295,000 protests in 2024, with residential property tax reduction services in Illinois, Texas, Georgia, and New York. O’Connor’s possesses the resources and market expertise in the areas of property tax, cost segregation, commercial and residential real estate appraisals. The firm was founded in 1974 and employs a team of 1,000 worldwide. O’Connor’s core focus is enriching the lives of property owners through cost effective tax reduction.

Property owners interested in assistance appealing their assessment can enroll in O’Connor’s Property Tax Protection Program ™. There is no upfront fee, or any fee unless we reduce your property taxes, and easy online enrollment only takes 2 to 3 minutes.

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