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Paying for schools with property tax... an expensive method
to maintain local control

There are few issues where a universal agreement can be found. The need to reform financing for public education is agreed to by even those on opposite ends of perhaps the most polarizing domestic issue in Illinois, if not the nation. The means to that end is where the debate begins.

Most agree that school districts are too dependent upon property tax. Many agree that property tax based school finance creates districts that have wealth and districts that don’t. Some would agree that the gap between wealthy and poor school districts is widening.

Some would argue that a shift from local property taxes to state funding sources could mean a loss of local control.

The State of Illinois uses a complicated formula in dispensing state education money that is meant to equalize the gap between rich and poor school districts. According to Education Week’s annual “Quality Counts” rating, Illinois is the only state in the union that gets an “F” grade for its performance on equalization of school funding and has consistently received an “F” grade since 2001. The state has long record of underperforming on its constitutional requirement to provide an equal opportunity for a quality public education for all Illinois children.

In 1990, seventy of Illinois’ school districts sued the State of Illinois, challenging the constitutionality of the school funding formula. They argued that the Illinois Constitution calls for the state to pay half of all public education costs and that the widening disparities between poor and wealthy school districts severely impacted educational quality. The Illinois Supreme Court made its “decision” in 1996. The court interpreted the state constitution to mean that 50 percent is only a goal, not a mandate. While acknowledging that the present school funding scheme was a failure the State Supreme Court felt that the issue should be handled by the state legislature and not the courts.

Property tax fails to satisfy a founding principle of taxation in the United States of America: It does not apportion the burden of taxation on the basis of ability to pay. As property taxes have risen, primarily to cover the growing costs of public education, more and more people are picking up and moving from one community to another in a quest for lower housing costs. Especially hard pressed to meet the growing burden of rising property taxes are the family farmers, starting families, single parent households and the retired.

People are getting fed up with rising property taxes. A binding citizen-based referendum passed throughout the state that created the PTELL or tax cap law. The law severely limited the ability for school districts (and other non-home rule governmental units) to increase property rates without voter approval. School boards and administrations throughout the state might be spending as much or more time trying to pass referendums as they do on curriculum, school safety and staff development issues combined. (DeKalb School District #428 has tried three times, unsuccessfully, over the past three years to get a referendum passed. At his first official press conference this summer, Superintendent Dr. Paul Beilfuss, announced his strategy for another referendum attempt.)

In the November 2004 election voters in downstate Madison County overwhelmingly approved two “non-binding” advisory referendums regarding school funding. One asked voters whether the state should revise the property tax caps law to make it apply equally to all taxing districts, home rule or not, and it passed by a vote of 96,233 to 15,092. The other asked whether the state should pay the primary share of public school costs "thereby decreasing reliance on property taxes." It passed by a vote of 103,459 to 10,459.

It would appear that the ability to control education funding on a local basis through property taxes is an expensive proposition that is losing public support. But it might take the public pressure of a binding statewide referendum to shift the source of school funding.

In our next segment in this series DeKalb County Online will discuss the arguments for maintaining property tax as the primary source of education along with the arguments for shifting the burden to the State.