 Illinoisans are fleeing the state in record numbers. Homeowners pay the highest
property taxes in the nation. And high-need residents are suffering under budget
priorities that don’t put them at the front of the line.
Why?
A simple truth explains the root of this pain: Politicians do not bear the cost
of government. In fact, lawmakers on both sides of the aisle grow more and more
powerful as the size of state and local government increases.
To varying degrees, the power bases of both parties depend on the status quo.
Both sides would come under fire for taking on necessary spending reforms.
First, let’s look at the Illinois Democrats. Under the direction of Illinois
House of Representatives Speaker Mike Madigan, the Democratic political
operation has functioned in a similar fashion for decades. The party’s power
base is composed of state workers, public-sector unions, trial lawyers and some
social service providers. The foot soldiers of Chicago’s political machine make
up the remainder.
Most Illinoisans are familiar with that hierarchy and its consequences.
The Republican power base, however, is less understood. Stereotypical suburban
households and titans of industry come to mind. But that doesn’t paint the whole
picture.
Illinois is home to the most units of government in the nation at nearly 7,000.
And while some may talk a big game on spending reform, many Republican lawmakers
rely on the support of those duplicative local governments in their districts.
Here’s why that poses a problem: Local reform must be a major component of any
state budget plan. The pain felt by homeowners comes at the local level, and
it’s forcing families to move beyond Illinois’ borders.
Changing a culture of local government overspending will be difficult. It
requires aggressive consolidation. It requires freezing property taxes and
limiting the ability of local governments to raise revenues. It requires
reforming the state subsidies that block accountability and fuel excessive
spending. And it requires empowering local leaders to balance their budgets
without the burden of costly Springfield mandates.
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 Real property tax reform requires all of those things.
But politicians on both sides of the aisle are reluctant to throw
their weight behind the whole package, because those reforms strike
at the heart of bloated local government.
Take the Local Government Distributive Fund, or LGDF. This state
fund is made up of $1.3 billion in income tax money that the state
hands out to local governments with no strings attached.
Local leaders say this money is used to help keep property taxes
low. But that argument doesn’t hold water in a state with the
highest property taxes in the nation.
They also say it’s a pillar of basic services such as public safety.
That’s a convenient excuse. In reality, this money enables reckless
spending habits propped up by the state. Practices such as pension
spiking, sick leave accumulation and pension “pickups” are rampant
in the Land of Lincoln.
Money from the LGDF also enables local governments to pay the
state-mandated prevailing wage for work on public projects. The
costs this requirement entails are astonishing.
The average annual compensation package for workers receiving the
prevailing wage in Cook and Sangamon counties is over $110,000.
Meanwhile, private-sector workers in those counties take home median
earnings of $34,990 and $34,521, respectively.
Local governments are even spending taxpayer money to lobby against
taxpayer interests.
When a statewide property tax freeze proposal was gaining steam in
the General Assembly in 2015, government agencies across the state
paid out more than $9 million to lobbyists who killed reform
efforts, according to data obtained via Freedom of Information Act
requests.
And yet, most Republicans still won’t touch programs like the LGDF.
Doing so requires taking on the mayors, township supervisors,
highway commissioners, park district officials and legions of others
who have staked their hopes on multibillion-dollar tax hikes as a
way out of the budget mess.
More Illinois politicians must move beyond political convenience,
and muster the courage to ease that suffering. The path of least
resistance won’t cut it anymore.
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