Three years ago, the Chicago Urban League, a civil rights organization that encourages economic empowerment for African-Americans, sued the state of Illinois and the Illinois State Board of Education, alleging that the state's funding formula for education punishes minorities because it is based on property values. The Urban League, which hopes its case heads for trial this year, makes a persuasive case in claiming that the way public education is funded violates the state's civil rights act.
The Urban League's logic seems unassailable: Affluent school districts levy more property tax revenue per pupil than taxing districts whose property base is less valuable. When the Urban League filed its suit, it claimed that some schools, among the wealthiest, spent more than $23,000 per student each year while others, among the poorest, spent less than $5,000 per student each year.
While spending alone may not account for marked disparities in academic performance, the Urban League's empirical evidence is stunning. Only 74% of black and Latino students—students more likely to attend underfunded schools than their white counterparts—were reported to have graduated from high school, compared with 92.2% of white students.
The Urban League supports an equitable and sustainable public funding system that eliminates disparities in the resources available to Illinois schools, along with the unconscionable racial disparities in student performance.
While the Urban League's case winds its way through the courts, the Civic Federation, an independent government research organization, has weighed in on both the merits and the flaws of the Cook County property tax system. The federation acknowledges the gap in per-pupil spending in Illinois but recommends preserving and improving the locally controlled and collected property tax as a reliable, stable and visible revenue source for local government, including public schools.
At the same time, the federation suggests targeting additional state funding to help low property-wealth school districts raise per-pupil spending without capping spending by high-wealth districts. The federation's cogent approach appears to address effectively the Urban League's unquestionably legitimate concerns.
It's clear that Cook County's mind-boggling property tax system—plagued by inaccurate assessments, byzantine homestead exemption opportunities and subjective incentive classes—needs to be fairer but also simpler. Merely by reducing the number of taxing agencies—1,300 in Cook County alone—significant savings in administrative costs could be achieved.
In March, board President Toni Preckwinkle made good on her campaign promise to roll back the remaining half-cent of former President Todd Stroger's controversial sales tax increase. Let's hope Ms. Preckwinkle's tax-reform agenda soon includes collaborating with the General Assembly to revamp the county's indefensible property tax system.
Marc J. Lane, a business and tax attorney and financial advisor, practices law at The Law Offices of Marc J. Lane, P.C. (www.MarcJLane.com) in Chicago.
Reprinted with permission from Crain Communication Inc., Copyright 2011.
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