Too much local government makes Illinois inefficient, raises property taxes
Illinois is the most inefficient state in the Midwest and the 14th-most inefficient in the country. That’s driven in part by excessive units of local government – more than in any other state. High property taxes are one result.
Illinois’ No. 2 in the nation property taxes are partly because it is No. 1 in the nation for units of government, meaning consolidating and eliminating some units could cut property taxes.
A National Business Capital report ranked Illinois the least-efficient state in the Midwest and 14th-least efficient in the country for its governments. The report evaluated states along eight metrics including units of local government per 100,000 people.
Illinois’ inefficiency is driven by almost 7,000 units of local government – the most in the U.S. – and the cost of supporting all that bureaucracy. When population is part of the calculation, Illinois is 14th in the nation in units of local government per 100,000 people because it has the sixth-highest population.
The report included local government as a metric because “while population densities and geographic size vary greatly from state to state and impact the efficiency of local governments, each local government is replicating services that – in many cases – could potentially be offered by another nearby entity.”
Illinois has by far the most units of local government of any state at almost 7,000. The Midwest has more average units of local government than other regions, but Illinois still leads. In 40 states residents live under a maximum of two layers of local government, but in Illinois 61% of residents live under at least three.
Lawmakers have failed to reduce redundancy and waste, which could cut down Illinoisans’ second-highest in the nation property taxes by consolidating or eliminating unnecessary levels of local government. Illinois has had 6,000-7,000 units of local government for 65 years.
Illinois’ local governments are especially bloated by excessive townships and school districts, both of which are heavily dependent upon property taxes.
A 2023 bill would have empowered Illinoisans to dissolve some of the state’s 1,425 townships at the local level without approval from Springfield, but it failed. Gov. J.B. Pritzker also proposed legislation this year that would make it easier to consolidate or eliminate Illinois’ townships. Townships are heavily reliant on property taxes, so reducing townships could lower Illinoisans’ tax bills.
The issue is further complicated by Article I, Section 25, of the Illinois Constitution. It enshrined a right to collective bargaining, potentially limiting the ability to consolidate local governments because their collective bargaining agreements can trump state law.
Another way Illinois lawmakers can reduce excessive local government is by cutting administrative bloat in school districts. About half of Illinois’ over 860 school districts only serve one or two schools. This results in duplicative administrative roles and wasteful spending which could be eliminated without any changes to neighborhood schools.
The Classrooms First Act of 2019 would have allowed local voters to approve the consolidation of school districts while leaving schools intact. It should be revived. Illinois has more school districts than any state except Texas and California.
Burdensome and complicated layers of local government are just one factor contributing to Illinois’ inefficiency. Addressing them is an important part of making the state a more competitive, dynamic place to live and work.