Can Illinois Schools Crack Their Property Tax Addiction?
AURORA, Ill. — Illinois taxpayers, through local property taxes, pay $12 billion of the $20 billion it costs to educate kids in the state each year. State government chips in about $6 billion, and the federal government kicks in another $2 billion.
But each year, public schools complain they do not have enough money.
Instead of rehashing the annual fight over how much to spend on public schools, some lawmakers want to change how the state pays schools.
“If we don’t get a distribution method that addresses the diversity in terms of rich and poor districts,… we’ll never get the ‘how much we spend’ right,” state Sen. Andy Manar (D-Bunker Hill) said.
Massachusetts uses an “alternative wealth” formula, which blends property taxes with a community’s income level, to distribute K-12 funds.
North Carolina attaches a net worth to students. For every 30 students, for example, the school gets a set amount to hire a teacher.
High Reliance on Property Tax
Manar said Illinois relies too much on local property taxes to pay for schools. Perhaps the biggest change has been the explosion of state grants for local schools.
The state’s school funding formula is complicated, but essentially schools are promised $6,119 per pupil. Wealthy schools get less—sometime far less—and poor schools get more.
State grants are in addition to those per-pupil dollars and are worth hundreds of millions of dollars to some school districts.
“There is more money going to Chicago Public Schools than downstate [schools] because of the change,” state Sen. Sue Rezin (R-Peru) said.
Poverty grants are supposed to boost school funding where there is a high percentage of low-income families. But Illinois also sends millions of dollars in early childhood education grants and grants designed to offset tax caps.
Big Change: Teacher Pensions
But the biggest change in how Illinois pays for K-12 could come from a change in how the state pays for teacher retirements.
Illinois House Speaker Mike Madigan (D-Chicago) has been talking for more than a year about “shifting” the nearly $4 billion annual cost of teacher pensions from the state to local districts.
Some of that $4 billion could then be sent back to local schools.
But Rezin, Manar, and many other lawmakers worry a “cost shift” will only force local schools to rely on property taxes even more.