While state legislators debate adopting a graduated income tax, state Senate Democrats passed legislation to try to cushion the blow for taxpayers.
Along with putting the tax question on the 2020 ballot, the state Senate also passed a bill that would provide a conditional property tax freeze on school districts. The legislation, now being considered in the House, would go into effect in 2021 and only if the General Assembly and voters approve of amending the state constitution and do away with the flat income tax rate.
State Sen. Jennifer Bertino-Tarrant, D-Shorewood, explained that the property tax relief would apply if the state provides its share of education funding.
Democrats have argued that insufficient funding from the state has forced school districts to rely on local property taxes for adequate revenue. So if the state continues to increase funding to schools, as is projected since the passing of the education funding reform bill of 2017, that should help districts to rely less on property taxes.
“If we are fulfilling our obligation, school districts need to help with the process,” Bertino-Tarrant said.
The senator added that property tax is the top issue of concern for residents in her district. While she acknowledged the importance of local property taxes to finance public safety and local infrastructure, she hopes a freeze on school districts would incentivize the state government to do its part on education funding.
No Republicans in the state Senate voted for the property tax freeze even though high property taxes have been a major concern of many in the caucus.
Vehement opponents of the progressive tax proposal, such as state Rep. Mark Batinick, R-Plainfield, have argued that the way education is funded is the problem and that true property tax relief will come with fixes like consolidation and revenue sharing between districts.
On revenue sharing, he used the example of a power plant that may serve multiple school districts but is only located in one, so its property taxes only go to the district where it happens to be located.
Areas with a lot of property wealth, he argued, could keep property tax rates low, which could then attract more businesses and more wealth to those areas.
“You have these have and have-not districts,” Batinick said. “And the funding is all over the board instead of having good, stable funding for all school districts across the state.”
For the average Illinois public school district, a little over two-thirds of its budget comes from local property taxes, while only about 24% comes from state funding and 7.5% from federal funding.
The trend of relying mostly on local sources for funding applies to local districts such as Joliet Township High School District 204 (79.4%), Plainfield Community Consolidated School District 202 (64.6%), Valley View School District (73.4%) and Lincoln Way Community High School District 210 (89.9%), according to ISBE data from 2017-2018.
For one local district though, a property tax freeze wouldn’t have a huge impact. Joliet Public Schools District 86’s budget for 2017-2018 was about 59% funded by state dollars.
“As a school district that is primarily state funded, while we would certainly be impacted, Joliet Public School District 86 would fare far better than some of our neighbors who are more heavily property tax funded,” Tamara Mitchell, the district’s assistant superintendent for business and financial services, said in a statement.
Mitchell said if the same language had been in place for the 2018 tax levy, District 86 would have gotten about $675,000 less on a $40.7 million levy.