Civic Federation finds nearly 9,000 tax-guzzling government units in Illinois
A recent comprehensive analysis found the real number of government units in Illinois is 30% higher than the U.S. Census Bureau’s count. Too many government units mean too many taxes.
Illinois has more local units of government than any other state in the country – so many that four separate tallies of them give four different numbers.
The U.S. Census Bureau said Illinois has 6,918 local units of government. The Illinois Department of Revenue counts 6,042. The Illinois comptroller found 8,529.
Now a comprehensive analysis by the Civic Federation reports the number is 8,923.
All of those governments rely on tax money to operate, so it is no surprise Illinois shoulders the highest state and local tax burden in the nation, according to personal finance website WalletHub. It also has the second-highest property taxes in the nation.
Illinois has more units of government than any other state. It has more than neighboring Indiana, Iowa and Kentucky combined, according to the U.S. Census Bureau’s latest Census of Governments, which compares all states with the same criteria.
Consolidation faces unique challenges in Illinois: the Civic Federation’s analysis includes 57 pages of complex statutory rules and regulations from the Illinois Municipal Code governing the consolidation process for every type of government and kind of consolidation. Still, calls for consolidation are increasing. There are two bills currently that would help the efforts, with one specifically to consolidate school districts and the other to make it easier for Illinoisans to consolidate other local government.
Illinois has many governments serving few people
The Civic Federation report found 50% of Illinois’ 102 counties serve fewer than 25,000 people. Fifteen of those counties serve fewer than 10,000 people.
The report also found counties extended $2 billion of the $31.8 billion of property taxes levied statewide, which accounted for 35.3% of county budgets in 2018. While Illinois counties accounted for 6.5% of all property taxes extended in 2018, Cook County and all of the local government units within its borders levied $15 billion, 47.2% of all property taxes in the state.
Townships and municipalities
Townships serve as a layer of government between counties and municipalities, which leads to a redundancy of many services critics say can be performed without townships. Because of this service overlap and the fact that Illinois has more governments and townships than any other state, townships have recently become the target of consolidation efforts in Illinois.
The Civic Federation’s findings on townships and municipalities showed similar patterns of many units of government serving few residents. Illinois has 1,426 townships spread out across 85 of its counties, with 17 counties having no townships at all. The report found nearly half of the state’s townships, 709, serve fewer than 1,000 people. Townships, along with their road and bridge districts, accounted for $750.4 million of the property taxes levied in 2018, about 2.4% of all property taxes.
Illinois has 1,298 municipalities, the most of any state in the nation. A third of municipalities serve fewer than 2,500 people. Seventeen are coterminous, meaning the township and municipality share the same boundaries. Municipalities accounted for 18.9% of all property taxes extended in 2018, totaling just over $6 billion.
Illinois has 852 public school districts, with one-third of them in Cook and the collar counties of DuPage, Lake, Kane, McHenry and Will. Because of the large number of districts, Illinois has one of the lowest residents-to-districts ratios in the country, with just 14,449 residents per school district. By contrast, Florida has an estimated 220,888 residents per school district. The report also found that two-thirds of the school districts serve fewer than 1,000 students, and 26 districts serve fewer than 100 students.
School districts accounted for the largest share of property tax extensions, more than $18.5 billion, about 58.3% of all property taxes levied in the state for 2018. School districts in Cook County alone accounted for $8.1 billion, or 53.7%, of the property taxes levied in the county.
State lawmakers are currently considering the Classrooms First Act, House Bill 7, which would form a commission to recommend merging 25% of Illinois’ district-level education administration while preserving schools. Illinois spends 2.5 times the national average on “general administration,” which is the cost of superintendents and board-level bureaucracy, and nearly half of its school districts serve only one or two schools.
Special districts, or special purpose governments, are often created by referendum for airports, civic centers, conservation, mosquito abatement and other limited purposes. The Civic Federation report found Illinois has the most special districts in the nation at 3,204. According to the report, only three other states, California, Texas and Colorado, have more than 2,500 special districts. Combined, all of these special districts accountedfor $4.4 billion in property taxes for 2018, 14% of the state’s total.
Findings support increasing calls for consolidation
The Civic Federation’s study shows state and local leaders must consider consolidation to reduce redundant, overlapping or inefficient governments. Consolidation has been an increasingly discussed solution to reduce Illinois government and alleviate problems such as rising pension obligations, increasing administrative costs and high property taxes. While there have been efforts to improve consolidation mechanisms in recent years, calls for changes to make the process easier continue to grow.
The current processes for consolidating units of government vary significantly depending on the type of government and the type of action being pursued. Found in Appendix D of the Civic Federation’s report, there are seven different procedural structures concerning the annexation, consolidation, or dissolution of townships, seven for school districts, five for municipalities, and three for counties. Even mosquito abatement districts are covered by six such structures. These procedural rules are listed for every type of unit of government in Illinois, making the consolidation process unnecessarily complex and prohibitive to citizens and local governments.
The Citizens Empowerment Act, House Bill 433, would allow Illinoisans to petition for a ballot initiative to dissolve a unit of local government they find is no longer necessary, streamlining the process and placing power in the hands of local voters. This power would apply to all local units of government. It would enable 5% of the electors from the preceding election to place a referendum on the ballot to dissolve a unit of government. The measure would allow local residents to work around barriers to consolidation, such as protectionism by local officials, and pursue potential cost savings and improved efficiency achieved by other communities through consolidation.
HB 7, the Classrooms First Act, approaches consolidation through a deliberate, structured examination that creates recommendations for reducing school district administration by 25% to free $716.6 million for classrooms or as taxpayer savings. No schools would close as part of the process. No bureaucratic consolidation would occur without local voter approval.
Consolidation can help address Illinois’ notoriously high combined state and local tax rate – the highest in the nation according to some recent data – and second-highest property taxes. Along with improving opportunities for consolidation, lawmakers must pursue serious structural changes to Illinois such as pension reform in order to establish a sustainable and responsible path forward for the state.