About a month ago I called on the citizens of Chicago to revolt against our screwed-up tax system by filing lawsuits—but I never dreamed it would happen this way. On August 20, in the midst of the fuss state senator James Meeks has raised about the spending gap in education funding, the Chicago Urban League filed suit against the state, seeking to overturn our system of financing public education. Represented by legal powerhouse Jenner & Block, the league has been egged on by none other than Mayor Daley—the irony of which I’ll get to in a bit.
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The problem is that schools in Illinois are far too dependent on the property tax—an increasingly regressive tax that more and more people, especially in rapidly gentrifying communities, can’t afford to pay. State law mandates that each school district spend a minimum of $5,743 per pupil annually. If a community is too poor to meet that with property taxes, the state makes up the difference out of its education budget, in addition to funding the other programs it usually doles out for. The more property taxes a district raises, the less state funding it gets. Since there’s no cap on expenditures—other than an electorate’s willingness to be taxed—the sky’s virtually the limit for wealthier schools. But impoverished communities that depend on the state struggle to cover basic expenses.
By contrast, Chicago spends $10,409 per student. Roughly $1.5 billion, or 35 percent, of its school financing comes from the state. (That’s well above not just New Trier but also the state average of 18.2 percent.) Another 16.7 percent comes from the federal government.
Yes, believe it or not, TIFs manage to exacerbate funding inequities too, at least in Chicago. Here’s how. As you’ve probably read in this column, TIFs are tax districts created by the City Council in which the amount of property taxes the schools, parks, and other taxing bodies get has been frozen for up to 24 years. Any tax increases go into a special fund to be spent by city officials with next to zero oversight. To compensate for the income siphoned off by the TIFs, the schools raise their tax rate. Even so, the city doesn’t reach its per-student minimum, and the state has to make up the difference.
I have a suggestion: expose Chicago’s TIF scam. The city that’s crying poor paid $8 million in TIF funds to subsidize a car dealership at North and Clybourn, to give one more recent example.
