Freezing property taxes will be financially disastrous to some school districts, the superintendent of a Lake County school district told a House panel on Friday.
Nancy Wagner, the head of Beach Park School District 3, was part of a debate on House Bill 4066 before the Property Tax Subcommittee. The measure would impose a four-year property tax freeze on Illinois.
"A significant decrease in the funding for schools would be the result of a tax freeze,” Wagner said. “Doing a two-year tax freeze for Beach Park would result in almost $900,000 less for the district over those two years, and for a typical homeowner, about $115 in savings … it is not a significant impact on homeowners but a significant impact for the school district.”
Many Republican lawmakers are advocating a property tax freeze because they believe the costs are driving businesses and residents from Illinois, which has the second-highest property tax rates in the country. HB4066 would implement the freeze alongside an income tax hike.
With five schools in her district serving 2,400 students, Wagner fears that a property tax freeze would further burden an already stretched system.
“I think the biggest issue for us is just the interactions of all the financial issues,” Wagner said. “This is one piece. We still don’t have an adequate funding model. For every 1 percent of a cost shift, we’re looking at a $100,000 [loss] for the district. If the seat belt bill on the school bus passes, we’re looking at a significant cost to operate our school buses. The state still owes us over $1 million. Four out of five schools ... need significant renovations."
While Wagner said she would love to see tax cuts for her community, she urged lawmakers to look for alternatives to a property tax freeze. Many other panelists agreed.
Julie Sullivan, director of legislative and political affairs for Illinois Realtors, suggested that the state should instead look at consolidating local governments.
“We have so many taxing bodies that rely on property taxes to fund their operations,” Sullivan said. “If we continue to streamline, consolidate and dissolve units of local governments, that can only help the burden on schools, municipalities and counties. I think that needs to be an essential part of the discussion.”
Ted Dabrowski, vice president of policy at Illinois Policy Institute, agrees that Illinois needs consolidation and urged lawmakers to reconsider the property tax freeze, which alone would not solve the state's problems.
“We have to be careful that the urgency and the pressure to put on a property tax freeze don’t force us into partial reforms that could actually lead to a worse situation in just a few years,” Dabrowski said. “Property tax reform must be done responsibly so that we don’t have unintended consequences in just a few years. The current solutions that are being debated are only focused on a property tax freeze. They only address the symptom, and the symptom is the high property taxes, but most of the discussion do not address the cost drivers -- the actual drivers of why property taxes are so high in the first place.”
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