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Funding schools with property taxes hurts Chicago students

Case in point: Wealthy Winnetka spends at least $7,000 more per pupil.

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JASON FREDERICK
  • Jason Frederick

In an effort to teach my beloved fellow Chicagoans how our school funding system works against us, I visited the land of milk and honey: Winnetka, hometown of Governor Bruce Rauner.

I traveled there last Wednesday with several CPS parents from the Raise Your Hand coalition, who were trying to rally Rauner's neighbors to their cause.

The parents hoped that going door-to-door in Rauner's town could convince one or two Winnetkans to call the governor on their behalf and say: The state's system for funding schools isn't fair!

As if appeals to fairness will make a difference to Rauner, once described by Sun-Times columnist Neil Steinberg as "a plutocrat with nine homes and a heart the size of a gumball."

Still the best line in recent memory, as far as column writing goes.

By chance, I visited Winnetka on the very Wednesday that Rauner grudgingly agreed to send enough state aid to Chicago to keep its school system from going bankrupt, at least for the time being.

But last week's stopgap measure doesn't confront the fundamental flaw in school funding: schools are largely funded by property taxes.

How much you pay in property taxes is determined by multiplying the value of your property by the tax rate.

The more a town's properties are worth, the more money it can raise for its schools.

The median value of a house in Winnetka—one of the wealthiest municipalities in the country according to the U.S. Census Bureau's American Community Survey—is about $1.2 million. In Chicago, it's about $208,000.

Also, Winnetka taxes its property at a higher rate than Chicago does.

In summary, the town takes advantage of its wealth.

Now you know why annual per-pupil spending in Winnetka is about $22,000, while in Chicago it's only about $15,000.

And why Winnetka's New Trier High School has ten librarians. While most Chicago high schools have none.

Well, that's also due in part to the fact that Mayor Rahm wastes money on trivialities—like a basketball arena for DePaul—rather than spending it on important things, like librarians. But let's keep the mayor's skewed priorities out of this conversation, at least for one column.

In general, people in Winnetka can afford to pay more in property taxes because, well, they make more money. The median income in Winnetka is about $208,000. In Chicago, it's about $48,000.

As an example, take Governor Rauner—please. (Sorry, couldn't resist.)

He pays about $82,000 a year in property taxes for his lovely home in Winnetka, according to the Cook County Treasurer's Office.

Of course, Rauner made about $57 million in 2014, the last time he reported his income. So $82,000 is less than half of 1 percent of Rauner's annual income.

In contrast, my dear friend Bernie, who lives down the street in Ravenswood, paid "only" $10,000 in property taxes this year. But his household income is about $100,000.

So Bernie's paying about 10 percent of his income in property taxes.

If Rauner paid 10 percent of his annual income in property taxes, he'd be kicking in $5.7 million a year, which still leaves him enough cash to buy a bottle or two of wine for his next get-together with Rahm, now that the two of them have apparently patched up the feud no one believed they were having in the first place.

Just so you know, not everyone in Winnetka pays as much as Rauner in property taxes. Most of Rauner's neighbors pay about $35,000 a year.

Many of them receive a home-owner's exemption, a tax break given to people who live in their property. Rauner doesn't. In 2013, Kerry Lester, a Daily Herald reporter, discovered that Rauner was receiving the home-owner's exemption on three separate properties, including the house in Winnetka. Even though, by law, a home-owner's only supposed to take the exemption for one property.

It's good to see the governor's corrected this oversight.

The point is that the Winnetka residents are largely insulated from the annual school-funding turmoil that has so many Chicagoans—like the parents from Raise Your Hand—howling at the moon.

Think about it this way: Winnetka's wealth enables it to essentially self-fund a first-rate school system with very little need of state or federal assistance. And so its schools are protected from politicians like Rauner.

Look, I'm not hating on Winnetka. The folks in the village do it right when it comes to schools. They don't pretend money doesn't matter when it comes to education. They don't nickel-and-dime their teachers. They offer their kids a wide range of curriculum choices. If we're serious about educating low-income students we'd emulate the spare-no-expenses model favored by New Trier, treating poor children in Englewood like they were living in Winnetka.

The challenge is how to pay for it. We can't right now—not unless Chicago property values, or incomes, or both go up dramatically.

We could move to a more progressive state income tax, so wealthier residents pay at a higher rate, thus raising more money for schools in Chicago and other poorer towns and communities.

But thanks to opposition from politicians like Rauner, a progressive income tax will happen about as soon as the Bulls hire me to replace Derrick Rose.

We could raise the property tax rate in Chicago. Undoubtedly, there are many people who can afford to pay more—including the governor, who also owns a condo overlooking Millennium Park.

But roughly 23 percent of Chicago residents live under the poverty line. So unless we can figure out some way to limit the tax hike only to, say, people who voted for Rauner, it would cause economic hardship to significantly jack up the rate even higher than the mayor did in his last budget.

Here's another idea: we could elect an enlightened governor who increases state aid for poorer school districts.

Alas, we've elected Rauner, who says schools in Chicago are like "crumbling prisons" that are unworthy of a state bailout.

It's pretty crummy for a North Shore guy to suggest that the Englewoods of the world are somehow taking advantage of the Winnetkas. But what do you expect from a "plutocrat with nine homes and a heart the size of a gumball"? v


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