Eliminating townships can reduce the property tax burden, save money, and make government more effective, but by how much?
DuPage County
Representative David McSweeney (R-Barrington Hills) at Transform Illinois press conference
By Alex Cordaro, Edited by Adam Slade - September 18, 2019
“Any governmental body that can’t justify its existence should be gone,” argues an op-ed in The Chicago Tribune. The piece was written in support for a bill introduced by Rep. David McSweeney (R-Barrington Hills) to eliminate townships in McHenry County. The bill last year would give McHenry County residents the opportunity to eliminate township governments and transfer most township services to the county through a referendum. On August 9, Mr. McSweeney’s bill HB348 was signed into law by Governor Pritzker after being vetoed by Governor Rauner in the previous session.
Aside from allowing McHenry County residents to abolish their townships via referendum, the new law also states that the county cannot levy taxes exceeding 90% of the taxes levied by the original township. Road districts in both McHenry and Lake Counties can be abolished if they are less than fifteen miles in length.
The effort to eliminate townships arose from the idea that townships are a replicative unit of government that provides the same services that the County government does in a less efficient manner. Sentiments like this are not new, and in recent years, support for dissolving township governments has been translated into legislative action, usually via referenda. Godfrey Township, for example, was dissolved after a successful referendum just last year.
Before passage, the new law had its detractors. Most notably Rep. Steven Reick (R-Woodstock), whose district is the only one in the House to be entirely encompassed by McHenry County, argued that there is no evidence to suggest that property taxes would decrease at all.
So how much savings should taxpayers expect?
Potential Tax Savings
According to the Illinois Comptroller’s office, total revenue among the 17 McHenry County townships amounts to nearly $26 million in FY 2018. Roughly $22.5 million of the total revenue is collected via property taxes. In fact, in most townships, property taxes account for more than 80% of total township revenue, ranging from 74.17% to 97.76% of revenue sources. Across all townships, property taxes account for over 83% of revenue.
McHenry County taxpayers could save roughly $2 million in property taxes.
The law states that the County cannot levy taxes exceeding 90% of the taxes levied by the original township, ensuring there will be tax savings. It is unclear, however, whether these savings could be considered substantial. Across all McHenry County townships, taxes make up over $20 million of total revenue, $18.6 million of which come from property taxes. If the county utilizes the maximum 90% of township property tax levy allowed under the new law, which leaves $1.86 million in property tax levy that would be reduced. McHenry County taxpayers could save roughly $2 million in property taxes.
More Effective Government
There is a precedent to suggest that expected savings are underestimated. In 2014, for example, Evanston residents voted to eliminate their coterminous township. The City of Evanston saved $780,000 as a result of the township dissolution, far exceeding original estimates of $500,000.
Not only would the new law provide property tax savings, but savings could be used to improve other needs in the county. Using the example of Evanston, rather than not spending those savings, the city directed it toward enhancing certain General Assistance client services, as well as advocacy efforts. According to the city, funding for Community Purchased Services, or services related to homelessness, mental and physical health, family planning and childcare, among others, increased 34% since 2012. Township dissolution savings were reallocated to:
- Mental health and dental services
- Job coaching and computer classes
- GED and basic education classes
- Substance abuse treatment
- Work programs
- Enrollment services for health insurance and Social Security
Regardless of potential tax savings, cleaning up Illinois’ heavily segmented units of government encourages effective government practice.
Regardless of potential tax savings, cleaning up Illinois’ heavily segmented units of government encourages effective government practice. In early Illinois history, townships were useful in providing local services to rural areas as many of the states’ cities and villages did not exist yet. Today, advances in transportation and technology allow counties and municipalities to more effectively administer services that were once viewed as a responsibility suited for townships, especially in more urban areas of Illinois.
McHenry County could be—and should be—the first county in the Chicago metropolitan area to test the waters of township dissolution and lead the region into a future of greater financial and government effectiveness. We, along with our Transform Illinois partners, thank Governor Pritzker for his support for enhancing government efficiency and prioritizing tax savings for Illinois residents.
Research assistant Alex Cordaro is the Effective Government Intern at the Metropolitan Planning Council, and he will be graduating with a Master of Public Policy from the Harris School of Public Policy at the University of Chicago in Spring 2020.