Citizens Empowerment Act Could Mean Relief for Illinois Property Taxpayers

Original article written by Justin Carlson for the Illinois Policy Institute  on March 22nd, 2021. A link to the original article may be found HERE.

House Bill 433 would make it easier for Illinois taxpayers to dissolve unnecessary units of government in the state with the nation’s highest number of government units.

Illinois is home to more than 6,000 units of local government, excluding school districts, which is ­nearly 1,000 more than Indiana, Iowa and Kentucky combined – and more than any other state. Illinois’ excessive number of local governments is a major contributor to its second-highest in the nation property taxes.

While public employee pension reform would offer the greatest relief to property taxpayers, the elimination of unnecessary layers of government is also essential to lightening the burden. House Bill 433, introduced in the Illinois House of Representatives by state Rep. Jonathan Carroll, D-Northbrook, would help by allowing local voters to petition for a ballot referendum to dissolve a unit of government.

Illinois has more units of local government than any other state

Illinois is an outlier, as Illinois local governments serve around 2,000 people on average, the fewest served among the 10 most populous states. By contrast, California has 3,433 local governments, which serve more than 11,000 people per unit on average. Florida has a population about 70% larger than Illinois but manages to get by with 1,617 units of government, only one-fourth the number in Illinois and serving more than 13,000 people per unit on average. Its effective property tax rate is also only 46% that of Illinois even though the state has no income tax.

How would the Citizens Empowerment Act help Illinois streamline government and lower property taxes?

The Citizens Empowerment Act, HB 433, would empower Illinois taxpayers by giving them an important tool to lower the cost of their government and rein in property taxes by:

  • Allowing Illinoisans to petition for a referendum to dissolve duplicative, excessive or unnecessary units of local government rather than relying on the General Assembly for permission.
  • Providing for the transfer of all real and personal property and any other assets, together with all personnel, contractual obligations and liabilities of the dissolving unit of local government to the receiving unit of local government.
  • Increasing transparency for local taxpayers as duplicative and often overlapping layers of local government are eliminated by voter mandate.

The Act would require a citizen-initiated petition to obtain signatures from registered voters equivalent to 5% of those voting in the preceding general election before a referendum to dissolve a unit of local government could appear on the ballot. The referendum would need to be approved in each of the dissolving and receiving communities – either by three-fifths of those voting on the measure or by a majority of voters in the election.

The bill reflects recommendations proposed  in 2016 by the bipartisan Local Government Consolidation and Unfunded Mandates Task Force to streamline government.

DuPage County leads the way in streamlining government

DuPage County has been a leader in the effort to streamline government. The county began its ACT Initiative(Accountability/Consolidation/Transparency) in 2011 to improve efficiency, reduce duplication and encourage resource sharing across county government. The General Assembly’s passage of consolidation legislation that applied only to DuPage County, including Public Act 98-126, enacted in 2013, made the county’s task easier. Since then, DuPage County has enjoyed notable achievements such as the dissolution of:

  • The Fair and Exposition Authority, a duplicative entity, in 2015 under Public Act 99-0183.
  • The Fairview Fire Protection District in 2014 after a partnership was formed with the Village of Downers Grove to form a “special service area” to provide residents with fire protection and emergency medical service.
  • The Highland Hills Sanitary District after the transfer of water services to DuPage County, which included receiving water from Lake Michigan, and sewer service to another district.
  • The DuPage County Election Commission, which was consolidated into the county clerk’s office in 2019 after passage of Public Act 100-0628 in 2018.

DuPage County currently estimates that its ACT Initiative will have saved taxpayers over $145 million since 2011.

Public Act 98-126  recognized that Illinois has too many units of local government, which leads to inefficiency and higher costs for taxpayers. Its language authorized county boards to dissolve or consolidate local government units and functions, except fire protection districts and special water districts, but it applied only to DuPage County. The Citizens Empowerment Act would allow citizens of any government unit to initiate a referendum to consolidate that unit. Its passage would expand the power of consolidation statewide and open up streamlining and cost-saving opportunities to all local governments.

Hope for McHenry County taxpayers

McHenry County also benefited from state legislation that applied only to that county. House Bill 348 was signed into law in 2019 and gave McHenry County taxpayers the opportunity to eliminate any of the county’s townships by a referendum. The same measure also required road districts in both McHenry and Lake counties to be abolished if they covered less than 15 miles of roads.

McHenry County administrators have begun researching questions and considerations on township dissolution and have met with representatives from McHenry Township to explore how those relate to that township. Township taxpayers should benefit from this effort. The average McHenry County property tax bill in 2019 was $6,469, according to ATTOM Data Solutions. The county’s average effective tax rate was among the highest in the state at 2.67% of a property’s value. That was higher than the statewide average of 2.05%, which is the second-highest in the nation according to the Tax Foundation. Woodstock’s effective property tax rate of 3.42% is the highest of selected municipalities in the county, according to a 2019 Civic Federation study.

Coterminous townships should be the first to go

Illinois townships have become notorious for corruption and comprise over 1,400 of Illinois’ units of government, making them prime targets for consolidation. Illinois has 17 coterminous townships, meaning they share geographical boundaries with a city, according to data from the Civic Federation. Two recent examples show how elimination of these coterminous townships can provide significant savings to taxpayers.

Evanston voters initially expressed support for dissolution of their township through a non-binding vote showing two-thirds of residents favored consolidating Evanston Township with the City of Evanston in 2012 before approving a binding measure in 2014. The move saved taxpayers almost $800,000 in 2015 and will save approximately $19.4 million over 20 years, according to The Civic Federation. The township shared the same borders as the city of Evanston and the township board and city council were made up of the same people serving dual roles, yet were separate taxing bodies. A majority of the savings was because of the reduction of administrative expenses, which allowed the city to enhance the services it offers to its residents.

In 2016, the Belleville City Council voted to dissolve coterminous Belleville Township, which it projected would save $260,000 yearly for taxpayers. The township’s basic function had been to hand financial aid to about 40 residents who qualified under very narrow parameters. Of the $550,000 in tax revenue it collected, at least $375,000 went to pay for salaries and other administrative expenses. Illinois law currently requires an act of the General Assembly to dissolve a township, which was required in Belleville’s case along with a multi-year push before a favorable vote from the township board and city council finally eliminated the township. There are currently 40 pages of explanations regarding statutory rules for annexing, consolidating, or dissolving government units in Illinois.

The Citizens Empowerment Act seeks to simplify and expand the power of citizens to petition to consolidate any local government entity, not just townships. It would also lower the signature threshold necessary to initiate a referendum from 10% of the electors from the previous election to 5%. Expanding consolidation opportunities will empower local Illinoisans, save taxpayer money and enhance government efficiency.

Local government consolidation can spur taxpayer savings

The Citizens Empowerment Act would open up the cost-saving opportunities already enjoyed by DuPage and McHenry counties to all taxpayers throughout the state.

Illinois’ 6,032 local governments rely largely on property taxes to fund their operations. The proliferation of overlapping and duplicative government units has contributed to Illinois homeowners’ crushing property tax burden. Statewide, residential property taxes have grown 43% faster than home values in the past two decades.

Making Illinois local governments more efficient through consolidation is an essential step toward providing much-needed property tax relief for overburdened homeowners.

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