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Illinois: The 7,000 local governments in this state are about to be downsized
By Illinois News Network / February 8, 2016
By Mark Fitton | Illinois Network
SPRINGFIELD — The governor, lieutenant governor and a handful of legislators on Friday rolled out the first bills derived from a year-long effort focused on how to downsize Illinois’ plethora of governments.
The goal, according to those officials: Whittle down Illinois’ nearly 7,000 units of government to get the taxpayers more for their money.
“Our present system of 7,000 governments is simply unsustainable, (and) it’s also a big reason we have the second-highest property taxes in the nation” said Rep. Jack Franks of Woodstock, the lone Democratic lawmaker to speak at a Naperville news conference headlined by Gov. Bruce Rauner, R-Winnetka, and Lt. Gov. Evelyn Sanguinetti, R-Wheaton.
“Our system is bloated, it’s inefficient, it’s opaque, and it’s unaccountable,” Franks said. “And our system, as a result, is open to corruption and abuse.”
“We need to stop digging a deeper hole,” he said. “It’s time for government to get out of the shadows. By implementing these ideas, I believe we can begin to restore balance, eliminate redundant governments and, most importantly, we can save taxpayers money.”
Gov. Rauner said the four bills rolled out Friday encompass eight of the 27 recommendations made by Sanguinetti’s bipartisan task force.
And, to a degree, the governor acknowledged, they represent some low-hanging fruit, or ideas perhaps the easiest upon which to find agreement.
“What we’d like to do is get some successes and walk before we run,” Rauner said.
The legislation includes efforts to:
— Let citizens and local governments consolidate duplicative, excessive or unnecessary units of government via referendum.
— Provide consolidation powers to all counties that now only apply to DuPage County.
— Extend to all townships and municipalities having the same boundaries the same authority to consolidate that is now provided only to Evanston.
— Remove arbitrary barriers to township consolidation so local residents or units of government can consolidate if they choose.
Regarding other recommendations of the task force, including some which Democrats see as hostile to collective bargaining and prevailing wage, Rauner said, “We’re not giving up.”
Rauner went further, saying the right-sizing of government is one of the keys to establishing financial stability for the state.
“In Springfield, the debate is raging: ‘Do we cut services or raise taxes?’ That really shouldn’t be the conversation,” the governor said.
“It should be, ‘How do we shrink the bureaucracy (and) shrink the cost of government so we can put more money into our human services, into our school system — which for me is the No. 1 priority — and how do we grow our tax revenue not through tax increases, but through a more growing economy?’ That’s got to be the conversation,” Rauner said.
And the governor says that’s very much a legitimate part of the budget debate.
“Let’s be clear: This is directly about the state budget,” he said. “If we can relieve taxpayer burden at the local level on property taxes for our working families and for our small-business owners, (then) our small- business owners can find it easier to grow and invest. And when they invest and grow, that’s more tax revenue for the state without raising rates. It comes through growth.”
State Rep. Mark Batinick, R-Plainfield, struck a similar chord.
“You hear a lot of talk about do we cut services or do we raise taxes. We don’t have to do either,” Batinick said.
“Just spending one year in Springfield, what I realize is that there’s a lot of inefficiencies in the way we do things, and that’s what this task force is about. We do have the opportunity to provide the necessary services that we need to to the citizens without having to raise taxes in order to do it,” he said.
The idea that Illinois can right its financial ship solely by finding efficiencies and promoting business growth, especially in the short term, isn’t universally accepted.
“Offhand, I can’t know for certain, but I’m compelled to say that for the state to cover the $4 billion or $6 billion or $9 billion it needs just on improved efficiencies? That’s sort of huge,” said Carol Portman, president of the Illinois Federation of Taxpayers.
“That’s not to say it (increasing efficiency) isn’t worth try and an incredibly important part of what we should be doing, but a solution is probably going to require addressing both the spending and revenue sides of the equation and not just improving efficiencies.”
Kent Redfield, professor emeritus of political science at the University of Illinois Springfield, concurred.
“Can we make government cuts and make government do what it is supposed to be doing more effectively? Absolutely,” said Redfield
“And we’re going to have to do some things to improve the state’s business environment — there’s no doubt about it,” Redfield said.
But, he added, firing every state worker tomorrow wouldn’t balance Illinois budget and solve its debt problems, he said.
With Illinois in its eighth month of fiscal year 2016 with no budget, neither Democrats nor Republicans have shown themselves willing to address their own bitter-pill issues, Redfield said, and those are likely reduced spending on social services for Democrats and some form of revenue (tax) increase for Republicans.
“They are not making the hard decisions,” Redfield said. “We need a serious conversation about what government can do and how we’re going to pay for it, and, as I near as I can tell, we’re not having that conversation yet.”
Without an overall budget for fiscal 2016, the state is still making payments on roughly 90 percent of the bills it covered in the previous year by paying for costs mandated in continuing appropriations, by court decrees, in the primary education budget that did pass and in debt service.
Earlier this week, Illinois also was sitting on about $7 billion in unpaid bills, Comptroller Leslie Munger, R-Lincolnshire, said in a news conference.
Without action by the Legislature and governor, the unpaid bills likely will grow to $10 billion to $12 billion by June 30, the end of fiscal year 2016, Munger predicted.
It’s time to consolidate local government in Illinois
Illinois has nearly 7,000 units of local government. That’s the highest count of any state in the nation, and the runner-up is not even close.
One of those units of government is the Naperville Township Road District, where seven employees maintain less than 20 miles of road at a cost of $116,000 per mile. City officials have said they could maintain the same distance at half the cost, and have moved to take over the road district’s duties on behalf of local taxpayers.
But the final decision on whether to outsource maintenance of those roads to the city rests with Naperville Township Road Commissioner Stan Wojtasiak, who has put local taxpayers on the hook for thousands of dollars in meals and treats, including alcohol, over the course of his tenure, according to the Naperville Sun. Wojtasiak said he spent the money to boost staff morale, and has yet to announce his decision regarding consolidation.
The Naperville case is emblematic of a statewide problem in Illinois: Having thousands of local governments poses serious problems when it comes to oversight and efficiency.
The result of the status quo? Illinois property taxes are the third-highest in the nation, according to the Tax Foundation, which also predicts Illinois will soon overtake New Jersey as the state with the highest property taxes. Many homeowners in Illinois are now paying twice for their houses over their lifetimes – once to the bank, and once to the government through property taxes.
A look into the nature of local spending in Illinois reveals big opportunities for sorely needed property-tax savings through government consolidation, and also shows the high costs shouldered by Illinoisans due to decades of political inaction.
But the drama over a few miles of Naperville pavement illustrates how the road to consolidation is often littered with obstacles.
One bipartisan bill being considered in Springfield would help smooth the consolidation process for many local governments. House Bill 4501 would allow county boards to dissolve certain units of local government via ordinance, a power already enjoyed by DuPage County.
While this is a step in the right direction, local governments will need more than the powers granted by HB 4501 to tackle major cost drivers to prevent property-tax bills from growing even higher.
For example, prime candidates for consolidation are Illinois’ 859 local school districts, which consume nearly two-thirds of the $27 billion in local property taxes collected across the state each year. According to data from the Illinois State Board of Education, a quarter of Illinois school districts serve only a single school, a third serve fewer than 600 students, and more than 40 percent serve only one or two schools.
Forthcoming research from the Illinois Policy Institute shows that reducing the number of school districts by half could lead to annual operating savings of $130 million to $170 million and could conservatively save the state $3 billion to $4 billion in pension costs over the next 30 years. In terms of the number of school districts per student, the move would put Illinois between California and Texas.
Beyond consolidating small school districts, many larger communities would be well-served by merging elementary school districts with high school districts.
The Homewood-Flossmoor area is home to two K-8 school districts and a high school district, an inefficient setup mirrored across the state. Instead of having a single “unit” school district that covers all schools in the area, taxpayers shoulder the burden of three separate administrative staffs, which contain duplicative and overlapping positions.
The base salaries of all three districts’ staffs cost Homewood-Flossmoor-area taxpayers nearly $5 million a year. By consolidating those three staffs into one, Homewood-Flossmoor could save local taxpayers millions of dollars annually. Consolidating the three superintendent positions into one would alone save $500,000 each year.
Consolidation focused on cutting unnecessary costs from school-district administration – and not on equalizing salary contracts or funding new facilities, as has plagued similar efforts in the past – is a fair and necessary step in communities across Illinois.
The same goes for road districts, mosquito-abatement districts, park districts, library districts and more.
But as long as state and local politicians fail to trim Illinois’ glut of government units, taxpayers will continue to be crushed under the weight of ever-higher costs. Transparency, accountability and fiscal responsibility all depend on consolidation in Illinois.
Austin Berg is a writer for the Illinois Policy Institute. He wrote this column for the Illinois News Network, a project of the Institute. Austin can be reached at firstname.lastname@example.org.