Last-minute games harm education reform

Chicago has vast property wealth and the largest

population by far in Illinois. But it also has a large amount of that property

wealth locked up in Tax Increment Financing districts.

According to figures released last week by the Center for

Tax and Budget Accountability, Chicago has over half of the $12.4 billion in

statewide equalized assessed valuation locked up in TIF districts. About 8.6

percent of the city’s total EAV is in a TIF district, well above the statewide

average of 3.95 percent, but only the seventh-highest percentage in the state

(29 percent of Clinton County’s EAV is in TIF districts, making it the leader

going away).

And partly because Chicago is by far the largest city covered

under state tax cap laws, the city’s public schools were able to claim $125

million in state adjustment benefits in Fiscal Year 2016 for districts with

property tax caps, according to numbers crunched by the Taxpayers Federation of

Illinois. But the way the laws are written, that $125 million was most of the

$141 million claimed by all school districts in Illinois. The total amount was

expected to drop by more than half during Fiscal Year 2017.

When valuations go up, so does the subsidy. In 2010, CPS’ subsidy

was almost $444 million to account for “lost” revenue due to the tax

caps. Elgin’s school district was second that year, at $18.3 million, but it

wasn’t even in the top 15 last year.

The governor’s amendatory veto of SB1, the school funding

reform bill, would slash state funding to school districts that are within TIF

districts and covered under property tax caps. That seems counter-intuitive for

this governor, who has railed against high local property taxes since first

announcing for office. While he denied it last week, it’s clear he wants to

force local school districts to raise their property taxes to avoid state

funding cuts.

Why would he do that? Chicago Public Schools funding,

obviously. The governor has often put CPS in the middle of his Statehouse wars.

One of the events that motivated him to run for higher office was the

successful Chicago Teachers Union strike, which angered him to no end. And he’s

clearly looking for leverage in the wake of the budget and tax hike veto

overrides.

That’s not to say the Democrats aren’t playing the same sort

of game. They added even more money to SB1 for CPS when the bill finally

reached the House and then jammed it through on a mostly partisan roll call.

The Illinois State Board of Education said it had finished

its numbers crunching of Rauner’s amendatory veto last week, but then found

some data mistakes, so as of this writing we don’t know what the numbers are,

but you can bet that CPS will take a big hit.

The bigger question is how many suburban and Downstate

districts will be slammed by this amendatory veto. Ford County, which is within

Sen. Jason Barickman’s district, has the second highest percentage of assessed

valuation in a TIF district in the state, over 10 percent of its EAV. Barickman

(R-Bloomington) is the lead Senate Republican negotiator on education funding

reform. Politically, this could be quite problematic.

These sorts of negotiations take years to complete. First,

you have to convince people to open a nasty can of worms – which isn’t easy because

so many folks have vested interests in the status quo and have cut little deals

over the years to sweeten their own pots. Then you have to convince everybody

to create a whole new can of worms. And then you have to actually do it. It

isn’t easy.

Education funding reform has taken at least four years to

get this far. Barickman has suggested that perhaps TIF districts created in the

future could trigger a change to state aid. But even that could be a heavy lift

at this late stage, with schools about to open.

Fiddling now with TIF and property tax caps could require a

rewrite of the whole bill to achieve the bipartisan goals that were laid down

at the outset of this monstrous task.

A last-minute amendatory veto isn’t the right way to go. If

the governor wanted this stuff, he had over two years to bring it to the

bargaining table. And the same goes for the House’s last-minute add-ons from

the end of May.

What they should probably do is back up and run a bill

that’s as close to the Senate-approved version as possible.

Rich Miller also publishes Capitol Fax, a daily political

newsletter, and CapitolFax.com.

Rich

Miller’s column is just a fraction of the content that appears in this week’s

print edition of the Southwest News-Herald. Want to get the all the news? Pick

up the Southwest News-Herald on local newsstands for just 75 cents a copy. For

greater savings and convenience, call (708) 496-0265 during weekday business

hours and order a subscription by mail, delivered each week to your home or

business.