Fair Share – Property Taxes Funding Education

In the mix of dealing with the State’s broken pension system, unfunded liabilities, and unpaid bills there is another matter that should be at the forefront of conversations – education.

Funding for education has grown rapidly over the years.  Taxpayers are feeling the hit.  The Illinois State Board of Education (ISBE) 2012 Annual Report indicates that since fiscal year 1993, state, local and federal spending (adjusted for inflation) has grown more than 73 percent.  Illinois taxpayers do not need graphs, in-depth research or reports to recognize the increased cost of education, they only need to look at their property tax bill.

Funding locally for school districts is generated by property tax dollars.  Generally, the more property wealth in a school district, the more money locally there is for education.  Alternatively, school districts with lesser property wealth receive more funding from the state.  East St. Louis School District 189 receives more than 70 percent of funding from the state due to low property wealth.  New Trier School District 203 receives 3 percent of their education funding from the state.  But is everyone chipping in their fair share of property taxes to locally fund education?

The Equalized Assessed Value, or EAV, is the result of applying the state equalization factor (33 1/3rd) to the assessed value of a parcel of property.  Property tax bills are calculated by multiplying the EAV (after any deductions for homesteads) by the tax rate. However, not everyone’s State Equalization Factor is 33 1/3rd.  Cook County is allowed by law to underreport the true amount of property wealth, which equates to more state subsidies.

Property values in the City of Chicago are assessed at 10% rather than 33 1/3rd. For example, Governor Pat Quinn’s estimated property value for 2011 Tax Year was, $290,031. His total assessed value is only, $29,031.  For Tax Year 2011, Governor Quinn paid only $4,052.71 in property taxes.  If Governor Quinn’s property value was assessed at 33 1/3rd, like everyone outside of the City of Chicago, he would have had to pay, $8,423.02.  In Rockford, that assessed value would taxed in excess of $10,000.

There is no logical reason why the property values in the City of Chicago should continue to go underreported.  The City of Chicago and collar counties that take advantage of this benefit have reaped extra General State Aid Funding (GSA).  According to Illinois Policy Institutes academic research, since 2000 alone, $6.4 billion in extra funding was sent to those school districts.

If we do not change the stronghold of the Chicago legislature in Springfield, taxpayers in the rest of the state will continue to foot the bill for expenditures that should be paid for by residents of Cook County.