Testimony

Freezing Property Taxes in Illinois

Tuesday, 9 June 2015, noon

Illinois Senate Chamber Capitol

 

Good Afternoon, thank you for the opportunity to testify today on tax caps and the proposal to permanently freeze local government property tax levies.  My name is Jeannie Dilger, I am the current President of the Illinois Library Association, which has over 3,000 members from across Illinois, including professional librarians, local library trustees, and library staff, local public and school libraries, academic institutions, and a variety of other library related institutions.  I am also the Director of the La Grange Public Library.  Perhaps most importantly for this hearing, my library is a tax capped library and has been since 1995.

Tax Caps were first imposed in 1991 to non-home rule local governments in DuPage, Kane, Lake, McHenry, and Will Counties.  Tax caps were extended to Cook County in 1995, and the following year all Illinois county boards were given the option of placing a referendum on the ballot asking whether tax caps should apply in their county.  Currently tax caps apply to almost 300 local public libraries.

Tax caps restrict an increase in the tax levy from year to year by the lesser of inflation or 5%.  Under this law and the current level of inflation, my library cannot increase our levy by more than current CPI above the previous year.  Public libraries get on average 98% of our funding from local property taxes.  While our park districts can charge program fees, and our villages gain revenue through other sources such as sales tax, we have no authority to charge programmatic or user fees, and indeed such fees would be counter to our most basic mission to provide free access to the public.

Why would a public library need additional revenue from one year to the next?  Simply put, costs rise.  Every year it costs more to buy library materials, pay staff wages and required benefits, fix the boiler and repair the roof.  However, library costs rise more than mere inflation because we are technology and service dependent.  Adopting new technology and increasing access to expensive resources is absolutely central to our mission.  Gas prices are low, but we don’t buy a lot of gas, we acquire digital and human knowledge; incredibly valuable and expensive. 

For many Illinois residents, public libraries are a haven for exploring their lifelong love of learning with free access to lifesaving health information, life-changing education and career opportunities. Children across the state eagerly push through the doors of their neighborhood libraries for afterschool activities, help with homework and exciting literacy activities. These libraries are a fact of life, taken for granted by most residents.

Even more difficult is the fact that when the economy suffers, library demand increases.  When our residents are hurting, the unemployed, especially our veterans, need help to prepare for and find jobs.  When school funding is cut, students turn to us for homework assistance and help getting into college.  When families can’t afford to go to the movies or buy a book, they use our downloadable books and streaming media.

What have tax caps already done to local libraries?  Based on a survey of our libraries, 25% of respondents said tax caps forced a cut to hours of service; 47% were forced to reduce book and other material acquisition budgets, 28% were forced to lay off staff or reduce staff hours; and 15% were forced to cut internet connectivity or reduce access to new technology.

It is crucial to note that some costs cannot be avoided.  We must make state mandated pension payments regardless of the limits imposed by tax caps.  As the revenues are restricted and our mandated costs go up, we have no choice but to cut materials, programs, services, and people.  Of those, my biggest concern is the people.  Many libraries have already cut programs and materials to the bone.  We are at a point where the only thing left to cut is the staff.  As we strive to pay a living wage, we will be unable to support current levels of staffing.  Over 50% of my staff live in the community they serve, and that is true of many public libraries.  Freezing their property taxes will do them no good if they are unemployed.

If the General Assembly were to impose tax caps on the entire state, these same consequences would spread statewide.  If the General Assembly were to impose a property tax freeze there is simply no way local libraries could continue to provide necessary service to our residents.

Our local public library trustees live and work in the community.  They are best suited to manage the finances of the library, and are in the best position to respond to our local residents.  Trustees give their personal time to serve the community, and local voters always have the option of voting elected trustees or the Mayors who appoint them out of office.

In La Grange, the Village trustees are considering a local property tax freeze for the 2015 levy.  They are utilizing water and sewer bills to make needed sewer repairs, and residents voted to raise the sales tax less than 1% to accommodate increased downtown visits from nearby communities.  However, those Village trustees recognize that the Library has no other source of income, and they still plan to request the maximum allowed increase under the tax cap for the Library to be able to keep up with increasing costs.  To me, this is just one example of how trustees of a local village or town can make the best decisions for their residents, based on the needs of that particular community. 

I appreciate the opportunity to present testimony today and urge the General Assembly to oppose the expansion of tax caps and especially oppose a one size fits all statewide property tax freeze.  Thank you, and I would be happy to answer any questions.

 

History and Scope of the Tax Caps

In 1991, the Illinois General Assembly passed the Property Tax Extension Limitation Act (Public Act 87-17) commonly known as "tax caps."  It affected taxing districts in the "collar counties" (i.e., DuPage, Kane, Lake, McHenry, and Will).  Tax caps were extended to Cook County in 1995, and the following year all Illinois county boards were given the option of placing a referendum on the ballot asking county voters whether tax caps should apply to taxing bodies in their county.

As of December 3, 2003, the following thirty-nine out of Illinois's 102 counties are under the provisions of this law:  Boone, Champaign, Christian, Coles, Cook, Cumberland, DeKalb, DuPage, Franklin, Greene, Jackson, Jefferson, JoDaviess, Kane, Kankakee, Kendall, Lake, Lee, Livingston, Logan, Macoupin, Marion, Massac, McDonough, McHenry, Menard, Monroe, Morgan, Randolph, Sangamon, Schuyler, Shelby, Stephenson, Tazewell, Union, Washington, Will, Williamson, and Winnebago.

(PTELL Referendum was rejected in:  Adams (April 1997); Bureau (March 1998); Carroll (Nov. 1997); Edgar (April 2001); LaSalle (Nov. 1997); Madison (April 1999); McLean (April 1997); Moultrie (April 2003); Shelby (April 1997, later passed in Nov. 2000); Whiteside (Nov. 1997); and Massac (Nov. 1996, later passed in Nov. 2000).

The tax caps restrict the ability to levy higher taxes by all local governments in a tax capped county except home rule units. Under the 1970 Illinois Constitution, home rule units are the County of Cook, all municipalities with a population over 25,000, and any other municipality if home rule is approved by a voter referendum.  In addition, four communities voted to rescind their home rule status -- Lisle, Lombard, Rockford, and Villa Park -- and are under tax caps.  Illinois has over 6,000 units of local government, the vast majority of which are non-home rule and therefore limited by the caps if they are located in a tax capped county.

While many public officials now realize that tax caps have adversely affected the ability of local governments to provide basic services, the law is still very popular.  Former Governor Jim Edgar and many legislators believe that tax caps were their most important accomplishment.  It is unlikely that tax caps will ever be repealed.  In the last several years, however, there have been a few small modifications to the law which have permitted some local governments to levy higher taxes for selected purposes without referendum.