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School districts across the state raise property tax levies

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Sunday, December 24, 2017  |  Article  |  Brendan Bakala - Illinois Policy Institute

Pensions (70) , Taxes, property (87)

Illinois’ school district debt and unfair government union bargaining laws contribute to the state’s massive property taxes.

Across the Land of Lincoln, school districts are raising their property tax levies, adding to Illinois homeowners’ already massive property tax bills. From the collar counties around Cook County to downstate Illinois, Prairie State homeowners shouldn’t be surprised if the school district portion of their property tax bill goes up in 2018.

Here are just a few of the school districts raising property tax levies:
•    The Springfield Public Schools District 186 Board of Education voted to increase the property tax levy 3.3 percent.
•    Crystal Lake Elementary School District 47 approved a 4.1 percent increase in its property tax levy.
•    Elgin Area School District U-46 approved a 2.1 percent levy increase.
•    Washington Community High School District approved a 4.9 percent levy increase.
•    Elmhurst Community Unit School District 205 approved a 4.6 percent levy increase.
•    Hinsdale High School District 86 Board passed a $3 million, 3.2 percent levy increase.
•    Glenbrook High Schools District 225 approved a 4.4 percent levy increase.
•    Wilmette School District 39 Board of Education approved a 4.35 percent increase, totaling nearly $2.2 million over the 2016 levy.
•    Glencoe District 35 Board of Education approved a 4.5 percent levy increase.

Illinois has more than 850 school districts, the fifth-most in the nation, and many of those school districts are in dire fiscal straits. School district debt has increased 67 percent, growing at double the rate of inflation from 2002-2015. All told, Illinois’ school districts have a whopping $21 billion in debt as of 2015, up from $12.3 billion in 2002.

While some school districts have seen increases in enrollment, Illinois’ overall student enrollment remained essentially flat between 2002 and 2015, according to numbers from the U.S. Census Bureau.

Although school districts have a limit on how much they can borrow, 72 school districts have exceeded the allowable debt limit, all together taking on $1 billion more in debt than the state’s school code intended.

Borrowing isn’t free, and school districts’ debt service payments ultimately result in higher property taxes.

In addition to massive debts, another driver of perpetual school district property tax hikes are Illinois’ laws granting unfair negotiating power to government worker unions. Illinois stacks the deck against taxpayers by giving government worker unions enormous power during contract negotiations.

Unlike every neighboring state, Illinois allows nonemergency public employees, including teachers and school district workers, to go on strike. Illinois enshrines a “right to strike” in state law, giving government worker unions a trump card during negotiations that taxpayers simply don’t have.

In the context of school districts, these rules give government worker unions the power to extract unrealistic and costly contract provisions from taxpayers.

Illinois also places no limits on what government worker unions can bargain for, unlike neighboring Wisconsin, Indiana, Michigan and Iowa. The state also places no limits on the length of contracts at the local government or school district levels, giving many government worker unions the power to lock in decadelong deals.

Local school districts also offer expensive “pension pickups,” which drive up local tax burdens. Under state law, teachers are supposed to pay 9.4 percent of their salary toward their pensions. However, school districts will often “pick up” all or part of their teachers’ pension obligations, which pushes the cost onto local taxpayers.

Nearly two-thirds of Illinois school districts offer this benefit, according to the Illinois State Board of Education 2015 salary report. And more than half the state’s school districts offer full “pickups,” meaning teachers don’t contribute anything toward their pensions.

This practice costs taxpayers $380 million annually. Chicago Public Schools alone budgeted $134 million for teacher pension pickups in fiscal year 2015.

This hurts local taxpayers, who often have to pay their teachers’ share of pension contributions through property taxes.

If Illinoisans want to see the school district portion of their property tax bills stabilize, Illinois’ school district debt rules, unfair government union bargaining laws and pricey pension pickups need to be reformed.