Tag Archives: Illinois government

Grocery taxes and local government revenue

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A recent announcement by Illinois Governor J. B. Pritzker that he wants to eliminate the 1% tax on groceries has some suburban official upset:

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In his budget address in February, Pritzker proposed raising taxes by almost $900 million, but called for eliminating the 1% grocery tax as a regressive tax that hurts poor people.

Revenue from the tax goes entirely to local governments. The mayors laid out how that would affect their municipalities.

The change would cost retail-rich Algonquin around $2 million, about 10% of its budget, Sosine said, calling it “unacceptable.”…

Libertyville Village President Donna Johnson said the mayors are sensitive to financially strapped residents, but said the cuts affect basic services like police, fire, public works and roads…

In anticipation of such criticism, the governor’s office released a statement that it supports local government operations with more than $1 billion annually in additional funds from sources including an internet sales tax, gas taxes and transportation bonds.

Local governments have an ongoing balance to keep in generating revenues and then providing services to their communities. On one hand, they have mechanisms by which they can raise their own revenue. As noted above, the small grocery tax has generated some monies that municipalities count on. On the other hand, local governments receive revenue from other governmental bodies. As noted above, the state of Illinois provides monies to communities through a variety of means.

The concerns expressed by these local officials hint at both immediate concerns of needing to address a potential budget shortfall if the grocery tax is halted and long-term concerns of making sure state funds continue to go to communities. Cited elsewhere in this story is that the percent of income tax monies going to communities has dropped several percentage points in recent years.

What is the ideal percent of revenue for municipalities that should be generated within the community? (Is the correct answer something like 110+%?) Answering this question has consequences for zoning and land use decisions as well as what local governments will offer to residents.

Proposed Illinois legislation would not allow communities to offer tax breaks to entice firms in other Illinois communities to move

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Companies can play communities off each other to see who is willing to offer tax breaks and other perks for moving to a specific municipality. A new proposed law in Illinois would aim to stop this practice among Illinois communities:

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It is long past time for Springfield to take municipal cronyism off the table, permanently. One of us, state Rep. Joe Sosnowski, R-Rockford, has introduced legislation in Springfield to that effect.The Local Government Business Anti-Poaching Act, HB0211, would prohibit local governments from offering special favors to Illinois businesses in exchange for relocating to their communities. It would end business incentives from politicians spending taxpayer dollars. It requires that businesses relocate based solely on their evaluation of a location and their ability to serve their customers with better prices, products and services rather than taxpayer funded special deals.Under this legislation, Illinois lawmakers and businesses would both refocus their energies on the state’s economic, education, law enforcement and infrastructure policies to put the state’s economy to work for everyone, not just the privileged few.Anti-poaching legislation will make Illinois’ economy as competitive as any state in the country, all year round.

My first thought in reading this: won’t Illinois companies then seek communities just over the border or in other communities if they cannot find better deals in Illinois?

A related thought: a municipal tax breaks seen as part of a freer market where companies and communities can compete for jobs, economic growth, profits, and more? If so, is an anti-poaching law limiting competition?

This may get into too many details but I wonder how the state or others might differentiate between moving because of a nice financial package and doing it solely for business reasons. There cannot be an announced deal in place? Are there penalties for Illinois communities who make offers and companies who ask for them or accept them?

Illinois finally providing some teeth to affordable housing guidelines for communities set in 2003

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In 2003, the Illinois legislature passed guidelines saying communities with less than 10% affordable housing needed to provide a plan to address this. Only recently did lawmakers set out consequences for not following this:

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A sweeping affordable housing bill, recently passed by Illinois state lawmakers, has strengthened the Affordable Housing Planning and Appeal Act (AHPAA). That law requires cities, with at least 1,000 residents and with less than 10% affordable housing, to submit affordable housing plans to the state. The law also allows for affordable housing developers to appeal the decisions of municipalities who reject their affordable housing proposals. Those appeals are heard by the Illinois Housing Appeals board.

The AHPAA, originally passed in 2003, is intended to encourage affordable housing, but resistance is rampant. As of October 2020, the Illinois Housing Development Authority identified 46 municipalities that met the law’s requirements. At that time, fewer than half had submitted plans or indicated that they intended to do so. Some municipalities cited home rule as the reason why they didn’t comply. The revised law says that doesn’t matter anymore. It gives the Illinois Attorney General enforcement powers, including seeking court relief, if the municipalities continue to flout the law…

Schecter said the next hurdle is getting units built — not just submitting plans. She said deadlines are needed for when municipalities must turn in their plans and by when they must achieve the 10% affordable housing requirement.

I have followed this particular Illinois statute as affordable housing, particularly in wealthier suburban areas, has been a contentious issue for decades. In some places, this has been addressed through court cases; see the example of Mount Laurel in New Jersey. Elsewhere, it is often left to market forces and municipal ordinances, which typically means that few communities explicitly address providing affordable housing (and not just housing for people groups they would like to have in their community) and local leaders and residents push back against living near cheaper housing (see the example of resistance to apartments).

The last paragraph quoted above suggests there is still work to be done. The recent changes suggests there are now consequences if communities do not submit plans. But, I would guess the real goal of the 2003 guidelines and the update is to lead to new affordable housing units. Even if tomorrow Illinois moved to push communities to submit plans, it would take years for the actual housing to be planned and built. According to various groups, there at least tens of thousands of affordable housing units needed in the Chicago region. If these legislative changes make a sizable dent in this number, this could help a lot of people.

First Black House speaker in Illinois represents a suburban district

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The American suburbs are more diverse than ever. This was illustrated when Representative Emanuel “Chris” Welch was elected yesterday as the Speaker of the Illinois House of Representatives:

https://www.emanuelchriswelch.com/7th-district

Welch, an eight-year lawmaker from west suburban Hillside, ultimately won 70 votes in the 118-member Democratic-controlled House, 10 more than he needed for victory. The vote came after months of debate over whether Madigan and the baggage of bribery scandal that has circled him for months had become too heavy a burden for a diverse caucus to endure.

Every news report on this I have seen notes that Welch is the first Black speaker. It is also worth noting that Welch is from Hillside, a small community roughly fifteen miles due west of Chicago’s Loop at the western edge of Cook County. Home to an early shopping mall in the Chicago suburbs as well as several cemeteries, postwar suburban growth consisted primarily of white residents. In 1960, Hillside was 99.8% white and in 1990 it was 86.3% white. The suburb is now diverse: 41.5% Black, 36.5% Latino, and 21.3% white. His district also covers a number of other diverse suburbs such as Maywood and Bellwood.

This connects with broader trends in the American suburbs. More Blacks have moved to suburbs in recent decades. In a number of suburbs with increasing Black populations, whites have moved out, echoing white flight patterns in large cities. This affects the experiences in and character of communities as well as political patterns.

With notable events like this, the image of suburbs may slowly change. There is still not an evenness of groups across suburbs – could Illinois residents imagine a Black House Speaker from DuPage County or McHenry County? – but the suburbs of Chicago and many other big cities are not exactly as white as they once were.

Ongoing Illinois debates about abolishing townships

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Illinois is known as the state with the most taxing bodies and one way to reduce that figure would be to eliminate townships:

It’s prompted dueling Republican proposals for new state laws, one to make it easier to get rid of townships, the other to require a study to show financial savings before any township unit could be dissolved.

Illinois has 1,428 townships, helping to account for more units of government than any other state. It’s a layer of bureaucracy formed primarily to serve rural communities, but most states do without them…

“The real issue, and the reason property taxes are so high in Illinois, is because we have 7,000 units of government,” said state Rep. David McSweeney, a Barrington Hills Republican who’s sponsoring the bill to make it easier to mount township abolition campaigns in McHenry County. “The only way we’re going to reduce property taxes is to consolidate local governments. Townships are just a start.”…

Townships have three basic functions: maintaining roads that aren’t handled by other units of government, assessing property for real estate taxes, and helping the poor through food banks and emergency aid. Townships also often provide transportation for people with disabilities, as well as programs for senior citizens and youths….

Advocates of townships argue that they provide the most local, responsive service for the lowest price. In addition, several studies have found that expected expense reductions from government consolidation never materialized. A Rutgers University study concluded that “cost savings are not assured,” and that “most consolidations fail.”

Americans tend to prefer lower levels of government that they feel is more responsive to their daily needs. Taking the duties that townships do and pushing them up to a larger and more abstract county or state government can feel like ceding control to officials who do not know local conditions.

The article also makes it sound as if the research findings do not support claims that fewer bodies of local government would lead to cost savings. If that is not guaranteed, could a successful effort to abolish townships provide hope to some that government can be rolled back or reduced to some degree?

All said, efforts in Illinois in recent years to eliminate or consolidate units of government has been slow. The state legislature banned the formation of new government bodies and DuPage County slowly is reducing the number.

Infrastructure Week in Illinois intended to sell needed repairs and funds

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This week is one intended to help promote needed funding for infrastructure in Illinois:

With a new Illinois capital program delayed as the state goes 11 months without a budget, transit leaders have been sounding the alarm in both Washington, D.C., and Springfield about the dangers of waiting too long to invest in infrastructure. Business, labor and transit leaders will ramp up discussion nationwide Monday for the start of the thrillingly named Infrastructure Week.

It’s a tough sell — roads, buses and trains seem to work just fine until they don’t, and politicians don’t like to raise gas taxes or other user fees. Regional Transportation Authority Executive Director Leanne Redden admits that funding for bridges, signals and tunnels is not a sexy topic, but it’s crucial to keep the system going the way it should…

The Metropolitan Planning Council, which consulted with RTA officials and other experts around Illinois, determined that meeting the state’s transportation deficit requires an additional $43 billion over 10 years — on top of what is already expected in terms of capital funding…

He noted that no system is going to be in perfect shape all the time — it’s like your house, you want to keep it in a state of at least 90 percent repair, with a few projects on a to-do list. But Illinois’ state of repair is currently below 80 percent and could drop below 60 percent in the next five years, Skosey said.

It is unclear from this article whether this week is aimed at the public – who often doesn’t pay much attention to infrastructure and generally doesn’t like paying increased taxes for public services – or state officials and legislators – who aren’t doing much of anything in Illinois these days. I assume the general goal is to raise awareness but what would they like the public to do? Call a political leader? Vote different in the 2016 election?

Thinking about the role of governments, the public tends to assume or hope that governments will do the prudent thing for the future. In terms of infrastructure, this usually means keeping up with maintenance and taking care of needed changes before the situation gets dire. But, given the short-term outlook of many politicians these days plus many competing interests, infrastructure needs are often kicked down the road. Yet, compared to other major issues that can continue to be kicked down the road, at some point roads, railroad systems, airports, electric grids, and other necessary pieces of infrastructure can and will literally crumble and will require immediate attention.

Chicago Epic marketing cut due to state budget

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Chicago rolled out an “Epic” campaign this spring to attract tourists but it is now no more due to a lack of state funding:

Chicago’s latest tourism campaign, Epic, is about to end two months early thanks to epic budget cuts at the state level.

Choose Chicago, the city’s tourism program, is losing 40 percent of its operating budget in the latest set of state budget cuts, according to Crain’s. That means Epic, the (perhaps unimaginative) summer tourism campaign launched in April with a TV ad encouraging viewers to “be part of something epic,” would end July 1 rather than run through the summer. Unless they are talking about an epically rainy June, the campaign ending this early wouldn’t leave much sizzle in the summer tourism industry.

Choose Chicago CEO Don Welsh said in statement that the program will lose most of its funding, from the state hotel tax, unless there is a last-minute approval of the state’s 2016 fiscal budget—increasingly unlikely as the week progresses…

The loss of Epic could deal a blow to Mayor Rahm Emanuel’s vow to boost tourism to 55 million visitors by 2020. Crain’s says Rauner, who was once the chairman of Choose Chicago, believes tourism is a boon to the local economy.

Two quick thoughts:

1. If you go with a catch term like “epic,” it is bound to be used sarcastically if something goes wrong (like the campaign ends early). Not exactly epic…

2. How do we – the public – know that such marketing campaigns work? Even though the Epic campaign is ending early, did it have any influence? Did the slogan catch on? What does this mean for future Chicago marketing campaigns? Just because a big campaign was out there doesn’t mean that it did much in this media and advertising saturated world.

No money, no Illiana Expressway

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According to Illinois officials, the Illiana Expressway project has been halted:

Illinois Department of Transportation officials decided “in light of the state’s current fiscal crisis and a lack of sufficient capital resources, the Illiana Expressway will not move forward at this time. Project costs exceed currently available resources,” a statement from the governor said.

The move is not surprising, given Acting IDOT Secretary Randy Blankenhorn opposed the road when he was chief of the Chicago Metropolitan Area for Planning.

“We see no evidence the Illiana would lead to sustained job creation over the long term,” Blankenhorn said in 2013. “There is potential it would expose the state to significant financial risk.”…

Rauner is feuding with Speaker Mike Madigan and Senate President John Cullerton over the Democrats’ budget and how to solve a massive deficit.

This has been quite the controversial project and there have always been questions about the initial funding and ongoing costs. New highways are costly and Illinois doesn’t have much money to spend. Yet, now we get to find out whether this is simply another bargaining chip in the ongoing budget battles in Springfield. While we’ve seen a lot about the Chicago area politics of this expressway, what does Madigan think about it? Will the claims that the highway would be a boon for economic development be resurrected at some point?

Continued lack of affordable housing in Chicago’s northern suburbs

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Affordable housing is a problem throughout the Chicago region but here is a closer look at the current state of affordable housing in Chicago’s North Shore suburbs:

Under the law, the Illinois Housing Development Authority in 2004 identified 49 communities where less than 10 percent of the housing was deemed affordable. At least nine of them are on the North Shore, including Winnetka, Wilmette, Highland Park, Deerfield, Northbrook, and Lake Forest.

Reactions to the law varied in those communities. Highland Park aggressively pursued ways to make affordable housing available. Northbrook took a more casual approach and set general goals. In Winnetka, after years of heated debate, officials voted in 2011 to just stop talking about the issue…

But over the last ten years, the affordable housing that has been added “is a drop in a bucket,” she said.

“The economy is bouncing back, but a lot of these communities are still catering to the rich,” said Schechter.

A significant barrier for affordable housing in the North Shore is the lack of undeveloped land and the high price of properties, said Richard Koenig, executive director of the Housing Opportunity Development Corporation.

It doesn’t look to me like much has changed. The 2004 Illinois law hasn’t done much as many communities already met the requirements (based on a formula that may then be too lax), it has little ability to enforce anything, and there are still continuing issues of affordable housing. I think there is also some disconnect about who the affordable housing is supposed to serve. In my experience, when suburbs like those on the North Shore talk about affordable housing, they are more willing to do something when they are talking about public servants, like teachers, police officers, and firefighters, or people who have been in the community before, like kids who grew up in the suburb or retired residents, who have difficulty living there on limited incomes. These suburbs are not thinking as much about the retail or service industry or laborers that might work in their communities.

This shouldn’t be too surprising: given the opportunity, most wealthier suburbs will zone land in such a way that the housing prices and options cater to a wealthier crowd. Affordable housing is an issue that should be taken care of by other suburbs, such as more working- or lower-class communities.

State Budget Crisis Task Force: big debt trouble in Illinois

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Even if politicians in Illinois don’t talk about this much, outsiders such as the State Budget Crisis Task Force are noticing the debt trouble in Illinois:

For years, Illinois has racked up billions in public debt to plug budget holes, pay overdue bills, and put money into its mismanaged pension funds. And for the people who live there, this has resulted in decrepit commuter trains and buses, thousands of unsound bridges, 200 hazardous dams and one of the most inequitable public school systems in America…

The group, led by the former Federal Reserve chairman, Paul A. Volcker, and the former New York lieutenant governor, Richard Ravitch, recommended an overhaul of Illinois’ budgeting practices, to make it harder to kite money from year to year and raid special-purpose funds. It also warned that tax increases may be in store…

Illinois has the lowest credit rating of the 50 states and has America’s second-biggest public debt per capita, $9,624, including state and local borrowing. Only New York State’s debt is bigger, at $13,840 per capita. But Illinois has not been able to use much of the borrowed money to keep its roads, bridges and schools in good working order, because years of shoddy fiscal practices have taken a heavy toll, the report said…

While many states have heavy debt burdens and unfunded pensions, the task force warned that Illinois’ problems had been building for decades and were advanced. The state was “insolvent” even before the financial crisis hit in 2008, the report said, but that was hard to detect because “budget gimmicks became a standard practice.”

Not exactly a rosy outlook.

This could relate to the discussion at the national level about how the federal government doesn’t have to balance its budget while other levels of government do. Well, states and other government bodies can still mess up the process even if they are “balancing the budget.”