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* Charlie Wheeler writes about the governor’s proposed permanent property tax freeze…
The bulk of property taxes payable last year — $16.9 billion, or 59 percent — went to local public school districts across the state, the chief revenue source for preK-12 education in Illinois, according to the state revenue department. Property taxes accounted for roughly 63 percent of schools’ operating resources, according to the state education board. Excluding retirement contributions, the state’s share was only about 26 percent of the total, well below the 44 percent national average. Federal funds completed the picture. […]
Phillips notes that the foundation level — the per-pupil dollars the state guarantees to each school district under a complex general state aid formula — has been stuck at $6,119 since Fiscal Year 2010, even as costs rise. Moreover, formula funding had been prorated since the 2012 budget year, so that districts received between 87 percent and 95 percent of the funds to which they were entitled. To his credit, Rauner ended proration in the current budget, in part by shifting money from special education programs to cover fully formula claims. He’s also proposed a $30 million increase for FY 2018 to fund fully general state aid. In addition, his plan would boost transportation funding by $145 million, hike early childhood spending by $50 million, provide an additional $38 million for bilingual education, and increase outlays for various other programs by some $12 million.
While the additional dollars would be welcome, the state’s stricken finances have forced schools to wait months for cash promised them in the current budget, as grant money for special education, transportation, and other programs languish in the massive bill backlog, pegged at $12-plus billion plus this week by the comptroller’s office. For example, districts have yet to receive any grant money for FY17, now eight months old. […]
Had a freeze been effect last year, [Monticello Community Unit School District 25] would have lost about $175,000 in revenue from its $16 million budget, equivalent to the cost of four teachers, Zimmerman said. The savings would have amounted to about $31 to the owner of a $150,000 home in Monticello. […]
While a property tax freeze poses the greatest threat to local schools’ revenues, Rauner’s recommended FY 18 budget includes several other proposals likely to increase their costs. As part of his cost-saving suggestions, the governor would provide no funding for after school programs, advance placement classes, arts/foreign language instruction, and other programs, according to legislative analysts. Would parents expect their local schools to keep some of those offerings, even with no state dollars to help defray costs? […]
An even bigger burden is embodied in the governor’s ambitious proposal to cut state contributions to pension systems for public school teachers outside Chicago and other public workers. Under his plan, local school districts and public universities— not the state — would pay the full retirement costs for new teachers and other workers, a cost-shift that would save the state an estimated $500 million, with schools and universities picking up the tab.
posted by Rich Miller
Monday, Mar 6, 17 @ 1:47 pm
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===An even bigger burden is embodied in the governor’s ambitious proposal to cut state contributions to pension systems for public school teachers outside Chicago and other public workers. Under his plan, local school districts and public universities— not the state — would pay the full retirement costs for new teachers and other workers, a cost-shift that would save the state an estimated $500 million, with schools and universities picking up the tab.===
Schools, universities, AND community colleges.
Comment by DuPage Monday, Mar 6, 17 @ 1:53 pm
So the populist posture of freezing property taxes is essentially a smoke screen for shifting pension contributions to school districts and public universities, pitting citizens against their schools. Compassionate governing this is not.
Comment by illinois Monday, Mar 6, 17 @ 1:55 pm
The entire article is worth a close read.
While the concept is very appealing, most voters have no realization of the unintended consequences.
Mr. Wheeler has no apparent partisan agenda and his respected reporting is worth noting.
Comment by illini Monday, Mar 6, 17 @ 1:57 pm
To destroy education and educational opportunities is to fail completely as a governor.
Can we get FEMA assistance for our schools? Rauner has created a disaster.
Comment by RIJ Monday, Mar 6, 17 @ 1:58 pm
===An even bigger burden is embodied in the governor’s ambitious proposal to cut state contributions to pension systems for public school teachers outside Chicago and other public workers. Under his plan, local school districts and public universities— not the state — would pay the full retirement costs for new teachers and other workers, a cost-shift that would save the state an estimated $500 million, with schools and universities picking up the tab.===
Rauner has said he wants to do the pension cost shift, but doesn’t the idea of a “permanent” property tax cap make it fiscally impossible to do that?
Of course, Madigan also wants the cost shift to be part of any deal on pensions. So perhaps Rauner’s so-called property tax freeze is in fact a poison pill.
How high would the state income tax have to be to raise an extra $16.9 million each year? I think if we start with that rate and negotiate the property tax freeze from that point we might get somewhere. In the absence of state cash to replace property tax money, no sane school board, county board or city council is going to go along with a “permanent” property tax freeze.
Surely the Governor knows this. And yet…
Comment by 47th Ward Monday, Mar 6, 17 @ 2:00 pm
This is important topic, but let’s be clear it’s Rauner bashing…again. Big surprise here…Oh and the university’s are charging students an arm and a leg so let not cry poor on how the university’s would be in trouble.
Comment by ams Monday, Mar 6, 17 @ 2:01 pm
Some excellent posts here already (Hat tip: Illinois, Illini, DuPage)
=The savings would have amounted to about $31 to the owner of a $150,000 home in Monticello.=
This is the part that people do not see or think about, the real dollars and the local impact. Ids it a better investment of tax dollars if it is made close to home or sending the money to the state?
Not everyone is going to agree but most will see the benefit of the local investment vs. sending the money to the state.
Comment by JS Mill Monday, Mar 6, 17 @ 2:07 pm
That was me at 1:55 p.m.
Comment by illinoised Monday, Mar 6, 17 @ 2:10 pm
Universities are charging an arm and a leg, but largely due to reduced, or ninexistent state funding and the statute that keeps a student’s first-year tuition locked in, thereby taking flexibility away from the financial management of the year-to-year operations of the institutions, while passing a much higher tuition on to the next year’s class. If the Universities, which are publicly funded (or should be!), pick up pension contributions, where does that money come from but even higher tuition and fees? Both Dems and Repubs have been totally derelict in both K-12 and higher ed funding. These are so-called public servants but apparently their public is only their donors.
Comment by My New Handle Monday, Mar 6, 17 @ 2:19 pm
@ams
No it’s factual reporting. Soon a lot of people will find out if they have to choose between their football program or teachers.
Comment by So tired of political hacks Monday, Mar 6, 17 @ 2:23 pm
I think a property tax freeze would make our regressive state tax system even more regressive. The richer you are, the more expensive property you tend to own. Yes, property tax increases can get passed down to renters, but there’s “stickiness” in that: landlords compete for renters and IIRC from something I read in The Atlantic a while back, tenant demand isn’t as elastic. Regardless, the wealthiest areas have fewer renters than homeowners anyway.
As for schools in particular, wealthier school districts can pass some of those costs to parents as fees (something that’s happening already at schools generally). Wealthier parents might be able to afford them, the way they might be able to afford a property tax increase.
A democratic party not beholden to labor unions would make this a much bigger issue. Heck, you could offer to make a Constitution trade: term limits for tax progressivity - both would be very popular. Instead…
Comment by lake county democrat Monday, Mar 6, 17 @ 2:26 pm
Let’s get on with the school funding reform G.A.! Only a couple decades overdue.
Comment by Shemp Monday, Mar 6, 17 @ 2:28 pm
As Mr. Wheeler’s article illustrates, the property tax freeze offers nothing of substance in the way of tax relief for anyone other than the most wealthy property owners.
It does nothing to help lift poorer school districts; it will just hurt the districts in the middle.
Unfunded mandate relief allegedly is included to alleviate the pain, but a closer look reveals that even those require a local referendum as opposed to leaving those decisions up to school board members who were elected to represent their communities.
About the best thing that could be said about a property tax freeze is that it would provide a good populist campaign talking point. Never mind the unintended consequences.
Comment by Decaf Coffee Party Monday, Mar 6, 17 @ 2:34 pm
== So the populist posture of freezing property taxes is essentially a smoke screen for shifting pension contributions to school districts and public universities, pitting citizens against their schools. Compassionate governing this is not. ==
Actually, if you take the time to thing about it, this is just one more “squeeze the beast” step.
If the pension payments are transferred to the local school districts, and the State doesn’t increase funding, and the local school district can’t raise taxes, the only choice the school district has is to cut programs and services.
If we change the discussion to community colleges or the universities, they have some flexibility to raise tuition but it will still squeeze them also.
For all Rauner’s talk about increasing school funding, this sure sounds like a kill the public educational system plan.
Comment by RNUG Monday, Mar 6, 17 @ 2:35 pm
As scandalous as it may be, I would like to point out that the high cost of programs in today’s schools are due to so many of them that did not exist when many commenters were in school. If folks think that teacher salaries are draining the coffers, I’d like to point out that often teachers make up (in some school disticts) a minority fraction of those in a school. There is the ELL program (and assistants), physical therapists (and assistants), social workers, psychologists, speech pathologists (not going to continue the assistant thing), classroom aides, reading specialists (), etc. Those in the classroom, directing what one might remember as instruction are somewhat lost in all the various functions of a school these days. Just informing. What people think schools educational goals are are a fraction of what schools are providing. So the dollars needed are far greater as programs and services have expanded.
Comment by Anonymous Monday, Mar 6, 17 @ 2:36 pm
lake county democrat, I would argue in general that property taxes are not inherently regressive,.
However, because all property taxes are local, statewide the system is pretty regressive since the rate needed to fund schools in wealthier areas (either based on assessed value or even when looking at income) is far lower than what is needed to fund schools in poorer areas, driving up rates unless the State starts spending more money for districts that have high concentrations of poverty.
Comment by Juice Monday, Mar 6, 17 @ 2:38 pm
@ams…tell that to the 375 employees of EIU who have been laid off.
Comment by Anonymous Monday, Mar 6, 17 @ 2:41 pm
It seems misleading to omit that every property tax freeze proposal currently on the table allows local tax hikes via referendum. If residents see a need to keep raising the levy, they can do so at the ballot box. A “freeze” simply eliminates the automatic increases so many local governments have grown accustomed to.
Comment by answer Monday, Mar 6, 17 @ 2:44 pm
The full article is an excellent read. The property tax freeze will severely cripple public school districts, especially downstate districts. When a school district loses approximately 63% of its revenue source, where is it to turn? And please don’t tell me the answer is the state.
Comment by East Central Illinois Monday, Mar 6, 17 @ 2:48 pm
To clarify to my post at 2:48 - - - I need to mention that it is the growth on the 63% of a district’s revenue, obviously a district would not be losing all of the property tax revenue with this idea.
Comment by East Central Illinois Monday, Mar 6, 17 @ 2:52 pm
Every parent knows the BigBrain scheme takes care of biz guys who own property — they pay less while families get socked with fees, fees and m9ore fees
Comment by Annonin' Monday, Mar 6, 17 @ 2:53 pm
What are we freezing??? Not one proposal I’ve seen spells out what is actually frozen. It sounds great to say ” I’m freezing your property taxes” which to the public means that a $5,000 tax bill would remain $5,000. But freezing rates doesn’t guarantee lower tax bills…. Illinois residents are expecting a real property tax freeze and will be shocked when they see tax bills continue to increase
Comment by JAH Monday, Mar 6, 17 @ 3:00 pm
State politicians freezing local tax revenues while increasing state taxes & revenue? I’m shocked. The next thing you know there will be gambling at Rick’s in Casablanca.
Comment by Diogenes in DuPage Monday, Mar 6, 17 @ 3:01 pm
@anonymous @2:36 — you can thank state & federal mandates for many of these.
Comment by Diogenes in DuPage Monday, Mar 6, 17 @ 3:05 pm
@answer, You are correct. By referendum that means that any increase has to be approved by the majority of voters in that District. You know the same voters who generally very uninformed and pretty much oppose any rate increase no matter how justified it is. Currently a strong majority of this same public oppose raising the income tax even though the single biggest mistake made since Rauner arrived on the scene was letting the tax regress to the 3.75% rate.
Comment by The Dude Abides Monday, Mar 6, 17 @ 3:15 pm
= If residents see a need to keep raising the levy, they can do so at the ballot box. A “freeze” simply eliminates the automatic increases so many local governments have grown accustomed to.=
Yeah, what the heck they can just run down to the ballot box and throw one out at the ballot box.
Why have an elected school board? Or legislature?
Elections take time and money.The outcomes are not a forgone conclusion. Most people are not engaged in the issues. Relying on referenda would make planning nearly impossible which erodes what little stability there is anymore.
It is a poor way of of running local government.
Local government, which is the most responsive to citizens and is the one mechanism of local control is not to be trusted with fiscal issues but state and federal government are?
Not much wisdom there.
Comment by JS Mill Monday, Mar 6, 17 @ 3:16 pm
Absolutely agree with other commenters that this is part of the “squeeze the beast” strategy. Gov. Rauner will extract cuts in state government as part of the income tax increase. He’ll do the same to local government with the property tax freeze. It’s going to hurt like hell and taxpayers won’t find out until it’s too late.
A property tax freeze sounds great, until you start seeing the impacts of programs cut and quality of other programs diminished. Local property taxes are high for several reasons, but one of them is that people want them high to be able to pay for the high quality of service that results from that investment.
Want to give taxpayers more authority to restrict increases in property taxes or to freeze property taxes? Fine. At least those voters will make the bed that they will need to lay in. But to let the GA and Governor enact it at the state level is just silly.
I’ve agreed with the Governor on several of his reforms. On property taxes, he’s 100% wrong.
Comment by KAA-boom Monday, Mar 6, 17 @ 3:19 pm
Another helping of cynicism, please.
A property tax freeze is too clever by 0.8%.
Or 0.7%. Or 2.1%.
I refer, of course, to jurisdictions affected by the Property Tax Extension Elimination Law (PTELL). 35 ILCS 200/18-185.
The PTELL bump-up for property taxes paid in 2016 was 0.7%. For taxes paid this year, it’s 0.8%. http://www.revenue.state.il.us/LocalGovernment/PropertyTax/CPIhistory.pdf
So it’s been exceedingly easy of late for faux-populists to bellow “freeze property taxes!” when the taxman’s extra take is going to be under one percent anyway. In effect — what’s the diff?
The diff comes in 2018 when the creep becomes a crawl. 2.1%.
But that’s then. This is now.
I’m outta here.
Comment by Third Reading Monday, Mar 6, 17 @ 3:34 pm
To the commenters that state if a governmental body wants the property tax to freeze to be overturned by a ballot - you are forgetting one very important fact. A school district technically cannot campaign, sway voters, spend money towards campaigns, etc. It is NOT a level playing ground. A government body starts out handicapped when any type of referendum question (especially having to do with property taxes) goes to the ballot.
Comment by East Central Illinois Monday, Mar 6, 17 @ 3:43 pm
Answer, if you read the whole article you would have read that referenda fail about two-thirds of the time. So for all the reasons outlined above putting every levy increase to the voters is easier said than done.
Comment by MyTwoCents Monday, Mar 6, 17 @ 4:45 pm
=== A government body starts out handicapped when any type of referendum question===
Yeah, but the teachers unions and AFSCME do have campaign funds.
Comment by Rich Miller Monday, Mar 6, 17 @ 5:24 pm
$175,000 wouldn’t pay for two teachers in my school districts.
Comment by Anonymous Monday, Mar 6, 17 @ 8:32 pm
==For all Rauner’s talk about increasing school funding, this sure sounds like a kill the public educational system plan==
RNUG is absolutely correct. Rauner would love to have Vouchers, but will settle on more Charter Schools. Beth Purvis several times tried to get the Rauner Commission to consider “school choice”, got nowhere, but still left a mention of it in the final Report.
Rauner despises the Chicago Teachers Union, and somewhat less so the public schools. But did you see that the Charter School in Chicago named after Bruce Rauner may unionize its teachers? (Tribune yesterday)
==in part by shifting money from special education programs to cover fully formula claims==
Charlie Wheeler should have made clear that that was a proposal of the Illinois State Board of Education that the Rauner budget office rejected.
Without saying so, the Rauner Commission proposes that, and local school districts have received zero payments for special education this school year due to the budget crisis (money is in the appropriation signed by the GUV, so schools will get it eventually).
Comment by winners and losers Tuesday, Mar 7, 17 @ 2:22 am
I don’t know, but is this some kind of relief for the money changers not to raise taxes on them that hold your title
Comment by Rabid Tuesday, Mar 7, 17 @ 6:59 am