There are several bills pending in Springfield that, if enacted, would permanently freeze property taxes, unless voters approved an increase in a referendum. All of the bills apply to school districts. Some apply to home rule governmental units such as the City of Evanston.
While Governor Bruce Rauner initially proposed a property tax freeze, a number of Democrats proposed that pending bills be amended to include provisions that would permanently freeze property taxes, unless voters approved an increase. At least two bills were amended with Democratic support.
A bill put in the hopper by Gov. Rauner links a property tax freeze with other provisions that would diminish the strength of unions in collective bargaining sessions and override the mandate that local governments pay the prevailing union wage in their contracts.
Last week there was a lot of sparring on the property tax issue. The House of Representatives voted in favor of one amendment to freeze property taxes and voted down another. Many Democrats voted in favor of the freeze, while many Republicans voted “present,” reportedly because the bills did not contain all the features the Governor wanted.
On June 9, the Senate discussed a property tax freeze. According to the Chicago Tribune, before that discussion Senate President John Cullerton met with the Governor and offered what a Cullerton aide described as a compromise to approve a property tax freeze in return for changing the funding formula for education, instead of the union-related changes. A week before, Senator Cullerton reportedly offered a different compromise involving property taxes.
We have no idea how this will play out in the coming weeks. But a property tax freeze concerns us, and it should concern everyone in our community who is interested in public education. Property taxes account for roughly 80% of the operating revenues of School Districts 65 and 202, and a property tax freeze would severely impact their finances. If it applied to home rule units, it would severely impact the City of Evanston.
As an example, District 65 has prepared projections of its financial operations for the next five years. The projections assume that the School Board will be able to increase property taxes by 0.8% in its December 2015 levy, and then by 2.0% in each subsequent levy year.
If District 65’s property taxes were frozen at the amount collected in FY’15, its projected revenues over the next five years would be reduced by a little more than $25 million.
In FY’20 alone, it would lose $11.2 million of projected revenues.
These losses in revenue are unsustainable and would result in the loss of many teaching positions – particularly because the losses may come on top of other curveballs the State legislature may throw at our school districts, including cutting back on State aid and transferring a significant part of the cost of funding teacher pensions from the State to school districts.
Our State Representatives Robyn Gabel and Laura Fine have voted against proposals to freeze property taxes, and we strongly support those votes. We urge everyone in the community to voice their opposition to property tax freezes in the waning days of this legislative session.