A new report from the researchers at the Chicago-based Civic Federation paints a bleak financial picture for area municipal governments, but you shouldn’t believe the hype.
According to Laurence Msall, president of the federation, “the financial condition of local government across northeastern Illinois is likely to get worse before it gets better, unless government officials work to rein in spending. Our data show several signs of trouble ahead with local government expenditures outpacing revenues.”
As any property owner knows, local government is spending more money. Msall gets this right. But beyond the obvious, Msall’s researchers do more to confuse issues about local government than to explain them.
These are some of the points listed in the summary of findings:
The per capita growth of government exceeded the growth of revenue.
Expenditures grew at five times the rate of population.
Local government increasingly relied on property taxes. Property taxes accounted for 42.5 percent of local revenue in 2000 and increased to 44.5 percent in 2003.
The number of full-time equivalent employees increased 2.9 percent. (Population grew by 2.7 percent.)
Long-term debt rose by 33.2 percent.
One of the most infuriating things about the Civic Federation report is that local government is actually cutting back. The data clearly shows this, but the researchers hide it by lumping local government in with the schools.
One table lists the type of government and the number of employees in 2000 and 2003. The conclusion is that local government grew 2.9 percent, but this is only true if you lump the school districts in with everything else. Since the school districts employed 43.2 percent of the total considered in 2000 and the number of school employees grew by 7.9 percent, it distorts the analysis.
Excluding schools and forest preserves-which cut 33.4 percent of its employees-local government cut 436 positions out of more than 118,000. The cuts can’t be described as drastic, but the growth in local government that the Civic Federation warns about is really a school problem, not a municipal problem.
Should school districts in the six-county area have grown by 7.9 percent during those three years? Maybe, maybe not. Broad consensus seems to exist that whenever possible it’s best to reduce class size. Hiring more teachers allows schools to reduce class size.
But for the Civic Federation to stir the numbers from village government, park districts, libraries, etc. into the same pot as the school districts seems misleading when every other type of local government (with the exception of special districts) are already cutting back.
The Civic Federation’s points about the cost of local government growing in an unsustainable way are valid, but the prescription to “cut, cut, cut” shows a lack of understanding of the problem.
The report shows that local government increasingly has to rely on property taxes and borrowing. Why is this?
Here’s the Nyberg hypothesis: health care costs are increasing much faster than revenues and the federal and state governments are offering fewer subsidies to local government.
The federal government has been cutting the money for the states and local government since 1994 in the name of local control. When the Republicans gained control of all three branches of the federal government this trend accelerated.
We saw an example of this locally when Rep. Danny Davis, D-7th District, sent his chief of staff to persuade District 209 to pay for the school-based health center at Proviso East. The federal government started the program less than five years ago, but wanted to shift the cost to Proviso Township taxpayers. District 209 deserves praise for not facilitating this shift.
If the government is wasting money let’s cut the waste. But cutting for austerity’s sake seems odd.