* Ed Tibbetts at the Quad City Times…
Some school officials say the governor’s changes to how property in tax increment finance districts figure into the formula for distributing state aid will mean less money for districts, including in the Quad-Cities.
“This would hurt us in a bad way,” said East Moline Superintendent Kristin Humphries, a supporter of SB1, the school funding proposal state lawmakers passed in May. […]
Humphries said it would cost his district about $1 million. […]
In the Quad-Cities, state Rep. Tony McCombie, R-Savanna, said Tuesday she is “extremely nervous” about the TIF provision and doesn’t know where it originated. McCombie, a former mayor, said the idea of a TIF is to help local economies.
“I’m afraid if this were to be passed this way, and I’m not sure where it came from, I’m afraid it would take away the economic tool aspect of it,” she said.
Rep. McCombie should ask the Illinois Policy Institute.
* The Peoria Journal Star editorial board eviscerated the governor’s amendatory veto of SB1 today. It’s worth reading the whole thing…
Third, it gets worse for local schools, since Rauner also removed the allowances made in the funding formula for districts subjected to tax increment financing (TIF) districts, used in many communities to try to stimulate economic development, if at the expense of local classrooms. Reportedly that would deprive Peoria schools of another $1 million annually. The governor also would punish tax cap counties, such as Tazewell.
The governor says TIF districts and tax caps permit communities to under-report their property wealth, or their local “capacity” to fund schools, and are therefore “subsidies” that should no longer be permitted. Fair enough. If it were up to us, we’d get rid of all market-distorting economic development incentives. But that’s not the fault of schools that have no say in the matter and in any event would no longer be able to make up for the revenue lost to TIFs, which already exist and have contractual obligations that can’t be undone now.
Meanwhile, Rauner repeatedly has said property taxes in Illinois are too high. With this amendment he is encouraging them to go higher here in central Illinois. It’s a huge contradiction.
* And here’s the take from the Chicago Reader’s Ben Joravsky, who has been railing against TIF districts for what seems like decades…
The amount of state aid any school system receives is partly based on the worth of the property it has to tax. The more property a wealthy town such as Winnetka can tax, the less state aid it receives. This makes sense, right? You want state aid to go to the folks who need it the most.
Not included in the formula currently is property that’s in a TIF district, which in Chicago means some of the hottest communities on the near south and west sides. So there’s a perverse incentive for Chicago to create more TIF districts—a point I’ve been wailing about for years.
Rauner’s proposing to change the law so the property in TIF districts is included in the school aid formula. That means less state aid for Chicago.
I’m torn on this issue. On the one hand, it’s about time someone took a wrecking ball to the TIF scam. On the other hand, if it means less money for CPS, then once again the people hit the hardest are the low-income children of Chicago. The poorest people get the short end of the TIF stick even when the program’s being “reformed.”
- Grand Avenue - Wednesday, Aug 9, 17 @ 9:34 am:
When this is all said and done and a new compromise bill passes over the Governor’s veto, he’ll still campaign on “stopping a Chicago bailout”
- wordslinger - Wednesday, Aug 9, 17 @ 9:38 am:
I’m thinking it wasn’t a good idea to throw TIFs into the mix, and not have a clue as to the fiscal impact of the AV, a few days before the first school payment is due to go out.
Then again, no way I’d ever make the cut for BTIA.
- Louis G. Atsaves - Wednesday, Aug 9, 17 @ 9:44 am:
Never fear partisans. The House hearings on the SB1 Amendatory Vetoes will commence today. The hearings will only focus on the amendatory vetoes? Nothing else rises to the level of importance concerning school funding in Illinois? Hmmm.
Yesterday, Rep. Currie stated she didn’t need to see any financial numbers from the State Board of Education or Illinois Department of Revenue.
The Tribune last week published a long article claiming that school funding will increase by $3.5 to $7.5 billion over the next decade or so thanks to the provisions of SB1 and the Amendatory Vetoes. Are those numbers changing? $3.5 to $7.5 billion? I know precision here is difficult, but that is one huge yawning divide.
In the meantime, let’s break out the popcorn and (newly taxed) soda pop and watch Speaker Madigan play his political games today on school funding. Without any numbers?
Illinois: Laughing Stock of the. Nation.
- JC is just saying... - Wednesday, Aug 9, 17 @ 9:45 am:
Hmmm…to use the governors own theory…You want TIF reform? Put it in a separate bill.
- The Captain - Wednesday, Aug 9, 17 @ 9:46 am:
I can’t recall a time when there have been so many editorials against Rauner. Most of the state’s ed boards aren’t necessarily as pro-Rauner as the Trib’s ed board (who could be?) but they’ve also mostly given him the benefit of the doubt so far but recently and specifically on school funding that’s changed.
It also coincides with Rauner’s staff turnover, the staff he fired for among other things failing to get his messaging out and the staff he brought in because he believed his messaging would be better. It looks like it’s not working.
- Will Caskey - Wednesday, Aug 9, 17 @ 9:49 am:
I’ve had this conversation with Joravsky. If you want to stop TIFs it’s really simple: just ban TIFs. Grandfather all existing obligations, block new ones and route them all back to the capital budgets of the relevant governments.
Trying to stop a flawed system by sabotaging it doesn’t fix anything. You’d think we’d have known that by now what with the pensions/Obamacare/*gestures broadly*
- My New Handle - Wednesday, Aug 9, 17 @ 9:49 am:
Really the BTIA right now is the Dodgers.
- illini97 - Wednesday, Aug 9, 17 @ 9:52 am:
As has been pointed out, it is absolutely unconscionable that the BTIA decided to throw their think tank/dorm room ideas on TIF and PTELL into the SB1 discussion - in August.
Hey BTIA, do you have any numbers on how this works? What is the goal here, to have Illinois schools shoulder even more of the cost at the local level? Do you think this discussion should have happened months and months ago?
What is it any of you BTIA superstars are doing, because it’s certainly not “working the process to achieve the Governor’s legislative agenda.”
So….what is it you do here? Fail?
- wordslinger - Wednesday, Aug 9, 17 @ 9:56 am:
Louis, what are you talking about?
The guv’s office doesn’t have a clue yet as to the financial impact of his AV on individual school districts.
That’s been in the news for many days now.
Is that the “laughing stock” you’re referring to?
- Anonymous - Wednesday, Aug 9, 17 @ 10:02 am:
“I’ve been successful at everything I’ve ever done.”
- DuPage - Wednesday, Aug 9, 17 @ 10:10 am:
One thing not mentioned is the rate of assessment on residential property being lower in Cook County then everywhere else in the state. That results in lower tax in Chicago and higher taxes in the rest of the state.
- Small town taxpayer - Wednesday, Aug 9, 17 @ 10:12 am:
I have always thought that TIF districts were designed to promote economic growth in a community. Is not that economic growth, including job creation, in the community as a whole designed to more than offset the tax ‘cost’ (tax loss) inside the TIF district? Is my understanding of the economics of TIF districts faulty or are the economic realities of TIF districts faulty?
- Century Club - Wednesday, Aug 9, 17 @ 10:15 am:
Gov: well, that didn’t work so well when my budget stalemate was so damaging to my own legislators that a dozen Republicans voted for a tax increase…
IPI: Wait til you see what we cooked up for SB 1!
- Jocko - Wednesday, Aug 9, 17 @ 10:16 am:
==[McCombie] is “extremely nervous” about the TIF provision and doesn’t know where it originated.==
Maybe she should ask Barickman or Durkin. Then she might contribute to the house decision to override the Gov. yet again.
- 47th Ward - Wednesday, Aug 9, 17 @ 10:19 am:
===That results in lower tax in Chicago and higher taxes in the rest of the state.===
How does Chicago’s lower property taxes make any other county’s property taxes higher? That doesn’t make sense.
- Norseman - Wednesday, Aug 9, 17 @ 10:21 am:
Rep. Tony McCombie, you’re not supposed to do any thinking. You are a subsidiary of Rauner corp. Your job is to take orders. Voting for your district can get you in trouble.
- cdog - Wednesday, Aug 9, 17 @ 10:38 am:
“One thing not mentioned is the rate of assessment on residential property being lower in Cook County then everywhere else in the state. That results in lower tax in Chicago and higher taxes in the rest of the state.”
Such a pile of .
Just more evidence that property taxes/valuations/assessments/TIFs/PTELL should not be included in education funding any longs in the state of Illinois.
- TinyDancer(FKASue) - Wednesday, Aug 9, 17 @ 10:47 am:
==I have always thought that TIF districts were designed to promote economic growth in a community.==
In blighted communities…blighted communities.
That’s the rationale, but that’s not how it works in Chicago.
- Rich Miller - Wednesday, Aug 9, 17 @ 10:51 am:
===but that’s not how it works in Chicago===
And lots of other places.
- DuPage - Wednesday, Aug 9, 17 @ 10:53 am:
@- 47th Ward - Wednesday, Aug 9, 17 @ 10:19 am:
===That results in lower tax in Chicago and higher taxes in the rest of the state.===
===How does Chicago’s lower property taxes make any other county’s property taxes higher? That doesn’t make sense.===
If the available local property value is assessed lower, the state formula gives the school district (CPS) more money from the state.
If the available local property value is assessed higher, the state formula gives the school district (collar and downstate) less money from the state. Thus the local school taxes are way higher to make up for the lower state money.
- Lt Guv - Wednesday, Aug 9, 17 @ 10:53 am:
==Your job is to take orders. Voting for your district will get you in trouble. ==
Norseman, FYP will stifling the urge to capitalize the change.
- Juice - Wednesday, Aug 9, 17 @ 10:59 am:
DuPage, you are completely ignoring the equalization factor, which is the “E” in “EAV”.
Residential assessments are lower in Cook County than DuPage, but commercial/industrial are waaay higher in Cook than DuPage (and everywhere else).
- Rod - Wednesday, Aug 9, 17 @ 11:06 am:
To Louis G. Atsaves the Tribune article gave a range of the increased costs for SB1 ranging from 3.5 billion up to $7.5 billion over a ten year period of time. In general that is what Rauner’s school funding reform commission also concluded months ago, The article also questioned if the school districts would ever see that money because of the lack of State revenue, which was a very legitimate observation.
- Joe M - Wednesday, Aug 9, 17 @ 11:56 am:
==One thing not mentioned is the rate of assessment on residential property being lower in Cook County then everywhere else in the state. That results in lower tax in Chicago and higher taxes in the rest of the state.=
Its how much money the taxing districts ask for that determines the levy that is applied against the assessed value - that determines the property taxes. In theory all assessments could be cut in half - or all assessments could be doubled - and the taxes would remain the same. The levy would be changed to accommodate either. For example, if all assessments WERE doubled, everyone’s tax bill could stay the same if all the taxing bodies only asked for the same amount of money as they did the year before.
Granted, property tax caps and/or taxing bodies always asking for their maximum amount does prevent that from happening. But my point is that it is the amount of money that the taxing bodies ask for that determines the tax bill - not the assessment.
- blue dog dem - Wednesday, Aug 9, 17 @ 1:18 pm:
How come Madigan and the Democrats aren’t rallying against TIF’s. I thought they were worried about school children. Must be campaign rhetoric after all
- Bill's brother - Wednesday, Aug 9, 17 @ 4:32 pm:
Where is Senator Neil Anderson on this? He is mever interviewed by local newspapers on any issue in his district. iI want to know what he thinks of East Moline schools when his own kids go across the river into Iowa to attend their fancy private school. Obviously Sen Anderson isn’t a fan of public schools or his kids would go there and he’d have something to say about his position with the public schools. His constant silence is deafening.