Jim Dey: Too many governmental entities spoiling property-tax broth

Jim Dey: Too many governmental entities spoiling property-tax broth

The pushback was immediate.

As soon as Urbana Alderman Erik Jakobsson suggested the possibility of abolishing the city's township government and folding it into municipal government in the name of frugality and efficiency, special pleaders stepped forward to defend the status quo.

They contended that abolishing Cunningham Township government, an invisible branch of rule that is a throwback to government of 100 years ago, would be a disaster because the township's services could not be duplicated.

One speaker asserted that it is "absurd to think that the city council can simply absorb the township."

It is, of course, not absurd. It has been done elsewhere. All that's required is the will of public officials to push back against lobbyists protecting their political interests and voters who recognize that Illinois, with roughly 7,000 units of local government, by far the most in the nation, has far more property-tax eaters than it can afford.

But will that happen? More important, if local officials and voters don't step up to the plate, what will homeowners do in the face of the rising property taxes needed to pay for thousands of avaricious taxing bodies?

A recent report prepared by Orphe Divoungey, an economist with the Illinois Policy Institute, asks the question whether property-tax pain is subsiding.

"Unfortunately, no. Government data show average property taxes paid in Illinois grew more than six times faster than household incomes from 2008-2015," Divoungey's report states. "And, more recently, those property-tax bills have risen as returns to investment in home equity have declined in Illinois — meaning property taxes are too often sucking away those savings of middle-class families."

While property taxes grew at a 48 percent clip between 2008 and 2015, the report states that average household income "increased by only 7 percent" during the same period.

"In other words, property taxes grew more than six times faster than household income in Illinois," Divoungey writes.

Much of the discussion related to skyrocketing property taxes, which support public schools, park districts, townships, etc., has focused on the revenue side of the equation — for instance, raising the state's income tax while reducing property taxes.

That approach never has gotten very far in the Legislature, where members of the House and Senate repeatedly have raised the state income tax while taking no action on property taxes other than to make it easier for local officials to increase them.

That's why the IPI report focused on the cost side, starting with a freeze "as a first step." Gov. Bruce Rauner proposed something of a freeze during last year's budget negotiations with Democratic legislative leaders, but his plan ultimately went nowhere.

That's why Divougney, among others, contends "legislators must act to rein in the cost drivers that push those (property-tax) bills higher and higher."

In others words, Divougney said, it's time to cut and consolidate local units of government.

"A great place to start is in Illinois' duplicative school district administrations," he said.

A joint 2017 report prepared by Chicago's Better Government Association and Metropolitan Planning Council explained why in infuriating detail.

The report noted that Illinois has 850 school districts, 26 percent of which are one-school districts. The administrative costs of operating one-school districts are 67 percent higher than multi-school districts. That's just one of the reasons why schools in Illinois spends $518 per student in administrative costs compared with national average of $216 per student.

The report recommended that school districts make a commitment to cutting back on the bloat by doing things like consolidating "geographically contiguous one, two, three or four-school districts into single administrative offices."

Does that sound feasible? Yes.

If private-sector corporations can handle payrolls for many thousands of people, why can't two or three small school districts consolidate their administration back-shops to handle payrolls, among other duties, for a couple hundred employees?

But will it be done? Do public officials have either the desire or the stomach to take on what surely would be a difficult job?

There's been hardly a peep uttered since the report was issued nearly a year ago, at least in terms of making any commitments to cost-cutting.

That's why property taxes keep going up and tax-weary Illinois residents, particularly upper-income earners, keep moving out.

"Surging property-tax burdens as Illinois loses people to other states in record numbers is a toxic mix. Indeed, local governments across the state continue to hike property taxes while the state is shrinking," the report states.

Jim Dey, a member of The News-Gazette staff, can be reached by email at jdey@news-gazette.com or by phone at 217-351-5369.

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billbtri5 wrote on January 10, 2018 at 8:01 am

Consolidation likely will not result in any tax reductions .  The units of government that take over will spend all the tax revenue and may even spend more.  

Innocent_Primate wrote on January 10, 2018 at 12:01 pm

If the level of property taxes is the true underlying issue, taking aim at townships is, it seems to me, akin to going on a safari and bagging fleas. Moreover, the services provided are state mandated and will simply be assumed by other governmental entities (county, city). Any guesses as to whether after such migration those services will be provided more efficiently and economically ? It would seem to me that in conjunction with calls for elimination or consolidation the proponent should propose a preliminary cost benefit analysis. "Look before you leap."