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Home / Blog / State of Illinois has the most taxing…

State of Illinois has the most taxing districts in the nation

By Steven Kandelman

Illinois lost about 33,700 residents from July 1, 2016 to July 1, 2017 according to the U.S. Census Bureau, and now has fewer residents than Pennsylvania.  Our state is now the sixth most populous state in the U.S.  This is the fourth consecutive year that Illinois’ population has decreased. This decline has occurred while other neighboring Midwest states saw population increases during the same period.  Missouri has gained 22,356 residents, Indiana gained 32,811 residents.  Meanwhile, Michigan has had an increase of 28,866 residents and Wisconsin gained 22,566 residents.  The overall U.S. population has grown 2.3 million during this period.  Some of the reasons cited by the people leaving the state are the increasing property and income taxes.[1]

One of the reasons for Illinois’ high property taxes results from its 6,963 taxing districts, including school districts, park districts and municipalities (such as cities, towns and villages). Most of these taxing districts are primarily funded by property taxes.  Illinois has about 2,000 more units of government or taxing districts than the nation’s runners-ups, Texas and California even though these states have more than double the populations as Illinois.  Illinois has the third highest Census-reported number of school systems in the nation with a total of 905.  Other Midwest states with similar populations, such as Michigan and Ohio, both have more than 200 fewer school systems than Illinois. In 2015, a total of $28.7 billion in property taxes was levied in the state of Illinois and nearly $18.0 billion or 62.6% went to fund school districts.  In Cook County, approximately 57.5% of the property taxes levied went to fund public schools.  In the collar counties, nearly 70% of property taxes went to fund public schools.[2]

As a result of the high number of local governments which need property tax dollars to survive, the average effective property tax rate in Illinois has grown to 2.32 percent which is the second highest in the nation, behind only New Jersey.[3] One way to save or reduce our property taxes is to consolidate or eliminate valueless government offices.  The Metropolitan Planning Council followed up the Better Government Association by assembling a Transform Illinois coalition of good-government groups which warns of this bureaucratic bloat of the Illinois governmental system and advocates for the passage of a bill that allows every Illinois county to start consolidating or eliminating taxing bodies whose need has diminished.  The Council’s latest report finds that Illinois could save another $2 billion a year if per capita spending on our library, park, fire protection, forest preserve and mosquito abatement districts matched the nationwide averages for those services.[4]

If government officials focus more on sensible approaches to governing, Illinois could reduce its property tax burden without completely overhauling its property tax system, as some politicians are advocating in this political season.  Some practical changes could be: a) the consolidation of school districts; b) the reduction of the tax levies of some districts to the national average; or c) the elimination of taxing districts with diminished value in the past decade or more.

 

[1] “Illinois drops from the fifth-largest state to No. 6”, by Angie Leventis Lourgis, Chicago Tribune, December 21, 2017

[2] “School Districts and Property Taxes in Illinois,” by The Civic Federation, October 6, 2017, pgs. 1, 2

[3]  “Growing Out of Control: Property Taxes Put Increasing Burden on Illinois Taxpayers,” by Erik Randolph, Ted Dabrowski, John Klingner, www.illinoispolicy.org/reports/growing-out-of-control-property-taxes-put-increasing-burden-on-illinois-taxpayers/, p. 2.

[4] “7,000 reasons for Illinois taxpayers to rise up,” by Andy Shaw, Crain’s Chicago Business, December 11, 2017, p. 2.