Last week Illinois Gov. J.B. Pritzker signed Senate Bill 3455, calling for an independent study of the state’s property tax system. While the idea of an independent review might seem like a prudent step towards reform, it is, in reality, a stalling tactic. Illinois residents are already well aware of the inequities and inefficiencies in the property tax system. What is needed now is decisive action on several fronts, not another costly and time-consuming study.
First and foremost, the funding of education in Illinois needs a complete overhaul. Currently, education funding is heavily influenced by Pritzker’s political aspirations, disproportionately favoring Chicago Public Schools and the Chicago Teachers Union.
While CPS receives 30% of its funding from the state, several suburban districts receive less than 10%, leaving suburban and downstate schools underfunded. This requires those districts to raise property taxes to cover expenses. Instead, the Illinois House should adopt a student population-based funding model. By allocating resources based on the number of students rather than political clout, we can ensure a fairer distribution of funds and improve educational outcomes across the state.
Additionally, it is imperative to restore the Local Government Distributive Fund (LGDF) to municipalities. Since 2011, the state has diverted over $9.4 billion away from local governments to address its budget shortfalls, leaving municipalities with fewer resources to provide essential services to their residents and requiring many of them to increase property taxes.
Gov. Pritzker penned an op-ed attacking mayors for a lack of fiscal responsibility when most municipalities’ property taxes are less than 10% of their local tax bill. He also touted the “replacement” revenue that municipalities have received. This revenue totals $818 million, only 8.7% of what has been taken from LGDF.
Local governments serve residents much better than the state and by restoring the LGDF, we can empower local governments to provide needed services, improve infrastructure, and enhance public safety.
Another critical issue that the Illinois House must address is the state’s pension crisis. The current Tier 2 pension system, although a step in the right direction, does not go far enough. Rather than rolling back these reforms as some have proposed, the state should build upon them by implementing a Tier 3 pension reform that transitions to a defined contribution system, similar to 401(k) plans found in the private sector. Such a move would help stabilize the state’s finances, reduce the long-term pension liability, and ensure that public employees have a sustainable retirement plan.
Furthermore, the Illinois House must stop its practice of passing unfunded mandates. These mandates place a significant burden on local governments, forcing them to allocate resources to comply with state requirements without providing the necessary funding. This not only strains local budgets but also limits the ability of local officials to address the unique needs of their communities. By halting unfunded mandates, the state can allow local governments to prioritize spending based on local priorities and restore a degree of local control.
Finally, the call for an independent study is another distraction from the real work that needs to be done. Illinois lawmakers have access to ample data and expert analyses on the property tax system. What is lacking is the political will to implement meaningful reforms. The State Legislature should focus on actionable steps that can be taken now to address the issues that have been identified time and time again.
Gov. Pritzker and the state legislature must move beyond symbolic gestures and take concrete actions to reform the state’s property tax system, fund education fairly, restore local government funding, enact sustainable pension reforms, and stop unfunded mandates. The residents of Illinois deserve real solutions, not more studies. The time for action is now.
