Illinois school districts urge support for additional 1% sales tax to fund facilities

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[February 15, 2025]  By Catrina Barker | The Center Square contributor

(The Center Square) – McLean County school districts are urging residents to join other Illinois counties in supporting a sales tax increase officials say is "essential” for school facility needs “without raising property taxes."

Originally, The McLean County schools website said “school districts in McLean County are asking voters to approve a 1% County Schools Facility Tax.” Now the website says, “school districts in McLean County are asking voters to consider a 1% County Schools Facility Tax.”

Bloomington District 87, Tri Valley, Heywoth and other area school districts shared the website that says it’s estimated 35% of the proposed one-cent tax revenue would be generated by visitors, commuters and non-residents of McLean County.

Bryce Hill is the director of fiscal and economic research with the Illinois Policy Institute.

“Property taxes are, generally speaking, a pretty good mechanism for funding schools because they adhere to what's referred to as the user benefit principles of taxation. So, that is that those people that live in the districts that benefit from either being able to send their children to public schools directly or who benefit from things like higher property values because they live in a good school district,” said Hill.

On April 1, 2025, voters in McLean County will decide on the proposed 1% County Schools Facility Tax, which districts have dubbed the “one-cent” tax. McLean County voters shot down a similar tax proposal in 2014.

"They call it a one-cent tax as a sales tactic to make it seem like it's not that much,” said Hill. “It would be a 1% sales tax in addition to things like your state sales tax, your local sales taxes, all of those things.”

According to proponents, the additional tax will address school safety and facility needs in McLean County public schools. Proponents also claim it will provide property tax relief.

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According to Effingham Unit 40 school district, 57 counties have a tax exactly like or similar to the proposed County Schools Facility Tax.

Hill said it’s a growing trend and more Illinois counties are approving ballot initiatives that create an additional tax.

“As far as whether or not this type of tax is better than a property tax, first, property taxes are extremely high in Illinois and school districts are the number one source of property tax levies,” said Hill. “The property tax has a levy that local government districts can choose to set at certain amounts. So there could be lots of tax layering going on that makes it incredibly important for taxpayers to be vigilant, especially when considering that 1% here, 1% there, the numbers really stack up, especially with recent changes at the state and local level.”

Hill explained most local governments are expected to increase the local sales tax to make up for Gov. J.B. Pritzker’s eliminating the statewide grocery tax that takes effect Jan. 1, 2026.

“Part of those negotiations allowed all local governments to have the ability to implement a 1% sales tax on groceries, but also gave non-home rural units of government the ability to increase their general sales tax rate by up to 1% without a referendum,” said Hill.

Hill said McLean County property taxes are higher than the statewide average.

“McLean County does not have PTEL [Property Tax Extension Law Limit]. So, part of an issue with property taxes is that local governments can raise them unabated in some circumstances where there's no property tax extension limitation law,” Hill said. “They can rise rapidly, and Illinois is home to the second highest property tax rates in the nation. In McLean County, they're actually slightly higher than the statewide average. They're at 2.2% [of a home's value]. Statewide average is right around 2%.”

The combined state and local sales tax rate in Illinois is seventh highest in the country. It averages 8.85%. That’s higher than any other Midwestern state and higher than any neighbor states, according to the Tax Foundation.

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