Illinois School Finance Suit
Scott Bauries on Tuesday, October 12, 2010 at 10:24AM I just received the pleadings on this, but school reform advocates last March filed a state constitutional lawsuit against the state superintendent, the state board of education, and the governor in Illinois. The case is styled Carr et al. v. Koch. This suit joins ongoing actions in Florida and California as another high-profile school finance challenge in a large state. The plaintiffs have also secured for themselves the help of some big legal guns--Sidley Austin, LLP, a massive, Chicago-based law firm, is handling the case.
Like the plaintiffs in the California suit, the plaintiffs in Illinois have (I think wisely) chosen to attack the state finance distribution system as not rationally related to a legitimate governmental objective. The objective that most states trot out to justify their acquiescence in local inequalities in funding due to inequalities in tax bases is the tired old salve of "local control." The plaintiffs essentially contend that this term has lost its meaning in the current world of standards, accountability, and NCLB, and I agree. Currently, the case is at the motion-to-dismiss stage, and my understanding is that the state is grounding its arguments in the separation of powers, as most state defendants do in these cases.
One thing puzzled me about the complaint's allegations. The complaint states local property tax "rates" for school taxes alone as ranging from about 1.5% to over 6% per annum. If this is true, then a homeowner with $100,000 of assessed valuation in a 6% district would owe $6,000 per year in just school taxes. That just does not pass the laugh test. I suspect that Illinois may have the same problem that Kentucky had before the Rose suit--assessing its property at wildly varying rates, none of which approach 100% of market value, leading to even wider disparities in revenues than even the published numbers would indicate.
At any rate, if the figures hold up, there appear to be very wide disparities in funding levels in Illinois, and the system might be subject to invalidation under even a rational basis standard. Keep watching this one!
Reader Comments (2)
Illinois has always been one of the most wildly out-of-whack states in terms of funding. It has tried 2 high-profile lawsuits before, but both were dismissed so I am really interested to see if this one makes it anywhere. I think there is a conservative leaning state Supreme Court at the moment, so I would give this less than a 50% chance at that level should it reach it.
I can say as a former homeowner in Southern Illinois, though, that the 6% tax just for schools is not a laugher for me. The property tax rates in Southern Illinois are astronomical because there is just so little property value upon which to raise the necessary money. Now, of course, some of those districts should be consolidated to spread the property tax window, but those kinds of numbers are not out of the question.
Thanks for the update.
They may indeed have wildly differing assement rates. I have seen that in other states. For example I know of a house in NY that was assessed at about 5% of true market value. I believe that all property in the town were the same. So you could easily see tax rates that don't make sense based on assessed value but do make sense on real value. There may be other factors in play as well. For example in NH where I live the tax rates in different towns in the same school district can vary a lot. If one town has a lot of commercial real estate and another town is basically a bedroom community for example.