By Guest Author- January 24, 2007
EDUCATION FUNDING & PROPERTY TAX REFORM
State of Affairs: By now, the debate in urban, suburban and rural communities across the state isn’t whether we should fix Illinois ’ broken school funding system; it’s how. The Metropolitan Planning Council (MPC), a leading member of the A+ Illinois statewide campaign for school funding and property tax reform, strongly recommends that property tax relief be a major component of the overall reform package.
For decades, the State of Illinois has been shirking its school-funding responsibilities and looking to local property taxpayers to make up the difference. The Illinois Constitution assigns the state primary responsibility for funding schools; yet, on average, state revenues account for just 36 percent of total school spending, compared with the national average of 50 percent.
The state’s over-reliance on property taxes to fund education is hurting property owners, students, communities, and Illinois ’ economic competitiveness:
- The system unfairly sticks property taxpayers with shouldering what is rightfully the state’s responsibility for funding schools; it has driven Illinois state property taxes, as a percentage of personal income, to the 10 th highest in the nation.
- Illinois has the nation’s second largest funding gap between property poor and property wealthy school districts. This spending gap parallels student achievement gaps: the 2005 nation’s report card singled out Illinois for having the nation’s worst achievement gap between its richest and poorest students – proving at the fundamental level, money really does matter.
- Illinois ’ extreme over-reliance on property taxes is leading to economic disinvestment in many communities. Most local leaders realize encouraging business development is vital to generate the necessary property tax revenues to fund schools. Yet commercial and industrial property taxpayers in Illinois , especially in Cook County , pay far higher property taxes than in neighboring states, to help generate revenues for local schools: for instance, property taxes in local communities like Chicago Heights are seven times higher than average industrial properties nationwide. In many areas, this is stymieing economic development.
- Illinois ’ ability to compete in an increasingly global economy depends not only upon the economic muscle of the Chicago metropolitan region, but also upon a skilled, trained workforce. Illinois ’ over-reliance on property taxes is forcing schools to make due with less than they need to provide a quality education – eliminating AP courses, increasing class sizes, cutting teaching positions – and cheating our students out of the knowledge and skills they need to be prepared for the jobs of tomorrow.
Solution: If the state’s abysmal financial state has a silver lining, it’s that it is creating a perfect storm for major systemic change in 2007. The Civic Committee of the Commercial Club of Chicago released a study in December 2006 warning Illinois ’ massive and growing debt is sending our state spiraling toward a “financial implosion.” The study prescribes cutting spending growth, boosting income taxes, and broadening the sales tax to generate additional revenues for currently underfunded state pensions, healthcare costs, and education.
MPC and A+ Illinois agree with the Civic Committee’s thorough assessment, but would add that property tax reform is critical, especially for distressed areas.
Property taxes for school funding should be replaced by transparent, guaranteed funding from the state. The mechanism for reducing property taxes recommended by previous reform efforts and by the state’s own Education Funding Advisory Board (appointed by Gov. Rod Blagojevich) is a percentage rebate funded by the state and passed on directly to taxpayers on their property tax bills. Any rebate system must ensure there are no cuts in funding to local school districts and create a direct accountability system between voters and the state legislature.
Property tax reform should result in both guaranteed, across-the-board relief, as well as targeted, additional relief for distressed communities. It is only by leveling the playing field by bringing the property tax burden down in distressed areas that they will be able to attract increased investment by businesses and homebuyers, who will in turn be able to support their local schools.
Key Legislative Priorities:
During the November 2006 veto session, a group of state legislators formed an Education Caucus, pledging to make education funding a top priority during the 95th General Assembly. Legislators from both chambers, both sides of the aisle, and across the state are participating in the caucus. Among them are:
- Rep. Bob Pritchard (R- Sycamore), Chair of Legislative Education Caucus, member of House Education Committee
- Rep. Roger Eddy (R- Hutsonville), school superintendent, member of Education Caucus
- Rep. David Miller ( D-Calumet City ), member of House Education Committee and Education Caucus
- Sen. Kimberly Lightford (D-Maywood), Chair of Senate Education Committee and member of Education Caucus