November 17, 2013
By Brian Costin

A lot of local governments are looking at increasing their property tax rates this time of year.

Although many of the individual government increases appear relatively small, when added up they could represent a significant increase in cost to local property owners.

The root of the problem — explored once again in a new study by the Illinois Policy Institute — is that Illinois has too many local governmental units.

The study found that Illinois has 6,963 units of local government, the largest in the nation. Texas, which has more than twice the population as Illinois, is second with 5,147 units of government. Florida, which has about 6 million more people than Illinois, gets by with 1,650 units of government.

That much government is expensive. Illinois has the second highest property tax rates among states and the following counties rank in the top 100 out of 3,000 counties nationwide for the highest median property tax rate: McLean, Macon, Peoria and Champaign. Comparing taxes across states can be tricky because each state’s total tax includes a different mix of property, sales, income and other fees. But it’s also important to remember that in Illinois all property taxes go to local government. So the implication is clear — property owners are paying for all these units of local government.

The institute’s study, written by director of government reform Brian Costin, argues that these myriad levels of government are also ineffective. Proponents of local governmental units in Illinois, especially those supporting township governments, have long argued that their form of government is closer to the people and better serves its constituents. Costin argues, however, that Illinois citizens face so many levels of government that they are confused about which government to approach with problems.

The state has 1,431 township governments, and it is a third layer of general government for most residents. In 40 states, residents deal with only two general layers of government — counties and cities. The state also has more than 200 single-school districts out of a total 911 school districts and a myriad of special taxing districts ranging from park districts to airport districts even to mosquito abatement districts.

Each of these layers has the ability to levy taxes. Some of those levies are small, but add up to high property tax bills.

Costin’s report also examines the process to change this system. Local voters can do so, but the requirements are onerous — more difficult than the process to change the state’s constitution. For example, to eliminate township government, a petition must be signed by 10 percent of the voters in each township and the time frame to collect signatures is 90 days. If a referendum is placed on the ballot, it must be approved by a majority of voters in three-fourths of the townships. To amend the state constitution, petitions require signatures from about 4 percent of registered voters, the time frame is 540 days and the amendment can pass with three-fifths approval of those voting on the amendment or a majority of those voting in the election.

That’s an issue the state legislature needs to address — making it easier for citizens to determine how many layers of government they prefer.

Many of the local governments looking to raise property rates cite rising costs, including pension costs, as a reason for their increases. The costs are legitimate, but could be lowered if the state didn’t have so many duplicative layers.

If local and state elected officials were truly concerned about the cost of government, they would work to reduce the complexity and size of local government in Illinois. Illinois property owners are paying plenty for local government; the money is just being wasted by unnecessary duplication and overlap.

TAGS: property taxes, taxes