At first glance, a 406-page report aimed at paring down Illinois’ whopping 7,000 units of local governments – and paring down its whopping property tax burden in the process – doesn’t tell homeowners and local governments anything they don’t already know.
It tells homeowners they pay too much to far too many governments, and the sheer number makes it impossible to keep an eye on them all. As for local governments, it tells them the never-ending parade of unfunded state mandates – directives from state lawmakers with no funding attached – drives up those costs.
But the final report of the Task Force on Local Government Consolidation and Unfunded Mandates seeks to prod lawmakers into giving local governments and voters the power to drive down the number of governments and their cost to taxpayers. The report, released to the public Monday after almost a year of work by the task force led by Lt. Gov. Evelyn Sanguinetti, comes with 27 recommendations toward both goals.
Suggestions by the task force include allowing voters to dissolve local governments by referendum and imposing a minimum four-year ban on the creation of any new governments, save those created by consolidating two or more.
“A large part of the reason why taxes are so high in Illinois is the result of an extraordinarily high number of local governments coupled with financially burdensome unfunded mandates,” the report concluded.
However, a number of the proposed unfunded mandates mirror the priorities of Gov. Bruce Rauner’s “Turnaround Agenda,” such as making collective bargaining optional and reforming or eliminating prevailing wage, that make them nonstarters in a General Assembly held by House and Senate Democratic supermajorities.
Rauner, who highlighted property tax reform as one of his top legislative priorities during his 2014 campaign, created the task force by executive order last February, a month after taking office.Illinois has the most units of government in the nation.
Texas comes in second at slightly more than 5,100, according to the report. Likewise, data from the U.S. Census Bureau and the conservative-leaning Tax Foundation conclude Illinois has the second-highest annual property-tax burden in the nation, which at 2.32 percent of home value is just behind New Jersey. Local governments collected $25.5 billion in 2013, according to census data.
The $589 million property-tax increase included in Chicago’s 2016 budget – the largest such hike in the city’s modern history – may cause Illinois to overtake New Jersey for the dubious top honor. A decade ago, the Tax Foundation ranked Illinois’ property tax burden as seventh highest in the U.S.
Just less than two-thirds of total property tax revenue goes to school districts, but the consolidation report does not exclude any unit of government from scrutiny. Illinois, the report stated, is the only state in which a majority of the population pays taxes to three levels of general purpose government: counties, townships and municipalities.
“Besides increasing costs for residents, when living in an area with too many layers of government, one’s ability to participate in the democratic process is increasingly difficult. It is next to impossible for residents to remember all of their officials’ names, let alone engage in meaningful dialog [sic] about what services the agencies representing them perform,” the report stated.
On top of that, state lawmakers are continually piling unfunded mandates on them, which drives up property taxes, according to the report.
Municipal governments on average face eight new unfunded mandates a year, and school districts six, according to data submitted to the task force by the Illinois Municipal League and the Illinois Association of School Boards.
While Illinois is awash in local governments, many of which provide duplicative services, state law does not give local governments and taxpayers many tools with which to consolidate and eliminate them, and in many circumstances acts as a barrier.
The report cites last year’s unsuccessful attempt by some McHenry County residents to ask the County Board to put township consolidation on the ballot as an example. A provision in state law that turned out to be a deal-killer would have raised taxes for the smaller of any two townships voters consolidated. As for eliminating McHenry County’s townships altogether, state law would require its voters to eliminate the County Board altogether and replace it with a board of no more than five county commissioners.
The task force, based on McHenry County’s attempt, is recommending a bill to hold taxpayers harmless by locking in the lower tax rate of two consolidating townships, and allowing voters to eliminate a county’s townships without having to completely change county government.
Six of its recommendations are aimed at easing consolidation of townships or their offices; however, townships account for an average of 2 percent of property taxes collected, according to the report.
Reforms aimed at schools, besides allowing voters to consolidate and limiting collective bargaining, include giving the Illinois State Board of Education better tools to incentivize consolidation, allowing driver’s education to be contracted out, and making it easier and more economical for school districts to contract for noneducational services. Another proposed reform would require state arbitrators to make available funding the primary consideration when settling contract disputes.
Labor unions that long opposed Rauner and his proposed reforms to wage and organization laws claim they would eliminate worker protections and drive down workers’ wages and benefits.
Three local politicians – state Rep. Jack Franks, D-Marengo, state Sen. Dan Duffy, R-Lake Barrington, and Barrington Village President Karen Darch – were members of the task force. Franks chaired a consolidation commission under former Gov. Pat Quinn, and the task force’s findings that consolidation should be locally driven mirror his commission’s findings.