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There isn’t much the locals can do without the state, and the state can’t do much without more money

Wednesday, Oct 16, 2024 - Posted by Rich Miller

* It’s really easy to understand the popularity of the state legislature killing off the 1 percent local grocery tax. It’s popular. Just about everyone is campaigning on the move this fall. But the repeal once again narrows an already too-narrow taxing base - a serious problem here. And, as locals are finding out, municipalities just don’t have a whole lot of other taxing options. From the Peoria Journal Star

Councilmember Mike Vespa said he believed the governor and legislators in Springfield are well-intentioned in ending the grocery tax, but he was concerned with what Peoria will be able to do about the $4 million the city will lose when the tax ends and said the city will have to lobby Springfield to repeal the repeal.

“It is a pass through, and it does hurt us and it hurts municipalities across the state, and having to make a tough decision to pass a tax to replace it — and there’s not an easy decision when it comes to making it progressive, making it more onerous on the rich than the poor,” Vespa said. “We can’t do income taxes. There’s only so much we can do. Luxury taxes, alcohol taxes, and I don’t know if we can make up that $4 million, unfortunately, without just instituting our own grocery tax.”

The state ain’t repealing the repeal. That horse has left the barn. Peoria is just gonna have to do its own grocery tax. Not ideal, but not much can be done about it now.

* Crain’s

Mayor Brandon Johnson should consider every option to avoid raising property taxes to close a $982 million budget gap for 2025, including hiking sin taxes, raising fees on garbage collection, implementing employee furloughs and putting a pause on making an advanced pension payment, according to the Civic Federation.

Without specifically endorsing every revenue or cost-cutting measure available to the mayor, the Civic Federation, led by former Chicago Inspector General Joe Ferguson, released the report detailing the options available to Johnson and the City Council two weeks before the mayor will announce his plan to bridge the shortfall for next year and close a $223 million 2024 deficit.

“While we applaud the assertion that ‘everything is on the table,’ the main course does not need to be and should not be property taxes,” Ferguson said in a press release.

“This report maps out a host of options whose consideration and implementation we hope will precede a historically reflexive recourse to property taxes, especially at a time of rising assessments and the looming, likely call for increased levies by other units of government, foremost CPS,” he said.

More details are here, including a bit about reinstating the grocery tax to plug an $80 million hole.

* Meanwhile, CPS CEO Pedro Martinez testified to the city council today. From a Chalkbeat Chicago reporter…


True, but the state finally has its own fiscal house in order. Without additional revenues, there can be no major local government/school bailouts…


But hardly any progressive legislators, let alone everyone else, are currently making a strong case for more revenues. They’re mostly about more spending, like everyone else.

* Also, from Republican Sen. Seth Lewis

At about the same time Johnson said Springfield needed to cough up billions for a Bears stadium, the mayor announced that the state “owed” Chicago Public Schools $1 billion. Despite pushback from leaders in the Senate and House, Johnson continues to insist he needs more money than is currently provided through the evidence-based funding formula (EBF), the system through which all Illinois public schools are funded based on need.

The passage of EBF was heavily negotiated and included input from CPS. In fact, the formula already gives Chicago a leg up with financial benefits and carve-outs that are not available to other school districts. For example, when EBF passed, CPS received a $203 million allocation (formerly the Chicago Block Grant) built into its base funding minimum. No other school district received this sweetener in its base funding minimum.

CPS has also benefited from legislation that allows the district to circumvent property tax limitation laws and receive a guaranteed minimum 37% of the state’s annual Early Childhood Block Grants regardless of CPS’ declining enrollment. CPS is also able to claim a legacy pension credit worth hundreds of millions of dollars annually that is not included in CPS’ EBF calculation. This makes the school district look less wealthy than it actually is.

There are students throughout the state attending schools with even greater need than CPS for more state resources. Chicago schools cannot jump the line to take a larger share because the needs of students in Chicago are not more important than the needs of other students across the state.

Every time the mayor and the CTU leadership make this stuff about them, they weaken the case for everyone else, including the state.

       

20 Comments
  1. - Demoralized - Wednesday, Oct 16, 24 @ 12:42 pm:

    ==and having to make a tough decision to pass a tax to replace it ==

    We’d prefer not to have to make that decision so we want the state to do it for us.


  2. - Donnie Elgin - Wednesday, Oct 16, 24 @ 12:42 pm:

    Senator Lewis nails it …

    “While I respect that Johnson has every right to come to the General Assembly and ask for money, he must also accept that we as lawmakers have every right to say no.”


  3. - TheInvisibleMan - Wednesday, Oct 16, 24 @ 12:46 pm:

    –receive a guaranteed minimum 37% of the state’s annual Early Childhood Block Grants regardless of CPS’ declining enrollment.–

    While this carve out seems bad initially, the issue of declining enrollment is happening in almost every school district right now. It’s part of a larger demographic wave which has been moving in this direction for almost a decade now - longer in some places.

    It might be politically convenient to mention this decline as if it’s only happening in Chicago and is
    somehow giving the city an unbalanced and unintended benefit, but I’m not sure if this gives Chicago much of an additional leg up specifically because of their own declining enrollment.


  4. - Alton Sinkhole - Wednesday, Oct 16, 24 @ 12:47 pm:

    Sadly asking CTU leadership and Brandon to not make things about them is akin to asking a fish not to swim or a bird not to fly. Just not in their nature.

    2027 countdown clock is on.


  5. - Former Downstater - Wednesday, Oct 16, 24 @ 12:49 pm:

    ==But hardly any progressive legislators, let alone everyone else, are currently making a strong case for more revenues.==

    One of those legislators told me recently Martinez lobbied them for a property tax increase. They told him he wouldn’t be able to find a sponsor, and if he did, he’d be lucky to get 20 votes on the board. That’s the reality right now.


  6. - supplied_demand - Wednesday, Oct 16, 24 @ 12:57 pm:

    ==It might be politically convenient to mention this decline as if it’s only happening in Chicago==

    Enrollment at CPS has increased the past 2 years.


  7. - frustrated GOP - Wednesday, Oct 16, 24 @ 1:00 pm:

    maybe it’s time for CPS to start to make some hard decisions, and close small enrollment schools. teachers need to take less of a raise. They are still some of the highest-paid in the state.


  8. - City Zen - Wednesday, Oct 16, 24 @ 1:24 pm:

    ==when EBF passed, CPS received a $203 million allocation (formerly the Chicago Block Grant) built into its base funding minimum. No other school district received this sweetener in its base funding minimum.==

    Only Sen Seth Lewis, JS Mill, and myself remember anything about the CPS block grants. Kudos to him for pointing out that they still live on.

    The main culprit is how convoluted the EBF formula is. It’s complicated in a way that makes it hard for most people to understand so they’re apt to defer to mysterious “experts” who they think must know better. Bad policy.

    ==Enrollment at CPS has increased the past 2 years.==

    Less than 1%, so negligible enough to not warrant a substantial increase in funding. Plus they were probably held harmless for all the previous years’ declines.


  9. - Rich Miller - Wednesday, Oct 16, 24 @ 1:35 pm:

    ===Bad policy.===

    That’s what we had before. Really bad.


  10. - Sue - Wednesday, Oct 16, 24 @ 1:40 pm:

    When SF elects to close schools to save money consolidating- it’s hard for Chicago to not follow its most progressive brethren-Johnson assumed that covid bailouts would never end- incredibly foolish


  11. - JS Mill - Wednesday, Oct 16, 24 @ 1:55 pm:

    =released the report=

    Is that like releasing the kraken? More like an opinion piece than a report. Not that I disagree with what they are saying except for leaving out property taxes.

    And then he added this at the end…

    =likely call for increased levies by other units of government, foremost CPS,=

    Not sure he understand that these “levies” are paid in the form of, spoiler alert, property taxes. LOL

    =The main culprit is how convoluted the EBF formula is.+

    What was passed is not what was originally developed. The EBF in current form changed to reflect political needs rather than funding needs. Not surprising (and lot actually a criticism) because the process was inherently political.

    There is no way to simplify the formula. The old way of funding was pretty simple which made it less transparent. The current EBF was changed to help CPS. They also get a big chunk of transportation money of the top, I remember it being 27% but I am not 100% positive of that number. If it is 27%, that would be way out of line given CPS% of students that ride the bus and their % of state enrollment. I remember discussing this very issue with Andy Manar. I don’t think he enjoyed the fact that I read the legislation and found that little nugget, but I still like Andy and appreciate what he did on funding.

    =the issue of declining enrollment is happening in almost every school district right now. =

    That is inaccurate. Many schools, not nearly “almost every”. There are many that are experiencing an increase in enrollment.


  12. - TheInvisibleMan - Wednesday, Oct 16, 24 @ 2:12 pm:

    “That is inaccurate.”

    No. It isn’t.

    This is a country-wide, decades long population shift taking place. Declines in district enrollment over the past decade range from 12% to 29%, depending on the district.

    This is not a private vs. public school thing. The bigger picture is this is happening because of long-predicted changes in the overall makeup of the US population.

    But I’m certainly open to you showing me the list of districts in the state which have seen increased trendline enrollment over the past decade, accounting for new development.

    There are simply fewer babies being born to take up those spaces in existing schools as they age up.

    Here’s my data. Where’s yours?

    https://www.brookings.edu/articles/us-births-are-down-again-after-the-covid-baby-bust-and-rebound/


  13. - CornfieldCowboy - Wednesday, Oct 16, 24 @ 2:17 pm:

    I thought the old Chicago Block Grant was closer to half a billion. Also Chicago residential property taxes are assessed at 1/6 as opposed to the 1/3 all of the remaining Illinois taxpayers get hit for. The EBF offers no incentive for any school district to tweak their operations seeing as they are perpetually “held-harmless” despite losing enrollment numbers. I wonder if the old system was actually better, as it seemed that property taxes were a bit more steadily to increase as opposed to the wild swings we see now.


  14. - Suburban Mom - Wednesday, Oct 16, 24 @ 2:21 pm:

    I also wonder a lot about why communities/the state/the country are not planning for a “soft landing” and births decline in terms of school buildings and enrollments, and increased transportation needs. (In 1965, 2/3 of American households had K-12 students, and most (outside of rural areas) lived within a mile of their school. Today less than 1/3 of households, which are smaller, have K-12 students, and lot sizes tend to be larger, meaning student populations are far less dense than they used to be.)


  15. - Roman - Wednesday, Oct 16, 24 @ 2:46 pm:

    Of course there are nuggets buried in the funding formula that are beneficial to Chicago. As @JS Mill rightfully points out, that was done to address “political needs rather than funding needs.” In other words, 60-30-1.

    What CTU and Mayor Johnson can’t quite grasp is that those CPS nuggets were inserted in the formula through the give-and-take of bill negotiations, not because Rahm Emanuel loudly shouted his demands until he convinced the rest of the state that Chicago was “owed” something. Rahm knew suburban Dems could never vote for any bill that looked like a Chicago bail out.

    Almost all Chicago-based members of the GA get this. CTU/Brandon do not.


  16. - Two Left Feet - Wednesday, Oct 16, 24 @ 3:28 pm:

    CPS still hasn’t fully paid back ISBE for ISBE’s error in calculating EBF. ($87m total owed in 2022, CPS agreed to pay $10.9m/year for 8 years).


  17. - JS Mill - Wednesday, Oct 16, 24 @ 3:31 pm:

    =No. It isn’t.=

    One, your study is a national study and this is an Illinois centric blog as you know. Your article says nothing about “the issue of declining enrollment is happening in almost every school district right now.=. It is about national birth rates. Certainly there is a relationship, but your data is not about school enrollment in Illinois.

    If you are interested in looking at enrollments of Illinois school districts you can look here: https://www.illinoisreportcard.com/

    I am willing to venture overall enrollment is down, but that does not equate to almost all. For the last three years that data is available total enrollment is down about 30,000. That is out of a little over 1.8 million or about 0.016%. The drop since 2018 is about 7%. That still does not equate to “almost every”. Rural Illinois has been losing population for decades and we are definitely seeing a drop in enrollment here. Gradual, but steady.


  18. - Two Left Feet - Wednesday, Oct 16, 24 @ 3:40 pm:

    There are 340 districts in Tier 1 (FY24). That is 340 districts that are ahead of CPS in state funding. 340 districts that are less than adequately funded than CPS. That can be drilled down further by geography, number of students, legislators, etc. We will see if reduced Personal Property Replacement Tax revenue for CPS pushes CPS back into Tier 1 next year. The loan is not an excuse to pay more CPS. There’s limited funding, a formula and a line.


  19. - No Relation - Wednesday, Oct 16, 24 @ 3:41 pm:

    Cornfield - I have property in Chicago and also downstate. The Cook Co property is assessed at 1/10 value not 1/6. The state multiplier for my county downstate is 1 while for Cook County is is a shade over 3. Which makes things about even but not quite.


  20. - Neighborly - Wednesday, Oct 16, 24 @ 3:53 pm:

    ==I am willing to venture overall enrollment is down, but that does not equate to almost all.==

    Genuinely concerning statistical analysis, here.


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