Monday, June 19, 2006

Blagojevich Takes Another Hit on Education Funding

The Building Owner's and Managers Association (BOMA), released a study of Chicago's commercial real estate last week, blaming Illinois' over-reliance on property taxes for school funding for high vacancy rates in Loop high rises. From The Chicago Reader (circluation 158,000):

“Illinois’ dependence on property taxes jeopardizes Chicago’s long-term economic prospects,” says Ron Vukas, executive vice president of the association, which represents about 80 percent of the commercial rental buildings in the Loop. “We need a change.”
....
For starters, the vacancy rate in downtown office buildings remains stubbornly high. At about 18 percent, roughly five points higher than the national average, it’s below the rate in Houston (21.2 percent) and higher than rates in New York (8 percent), Boston (11.5 percent), and Los Angeles (around 15 percent).
....
New office buildings have gone up in the Loop over the last few years. But according to the report they’re being built not for a new market but for an old one, as tenants move from one building to another. “Notwithstanding a few significant moves by companies to Chicago, on average the city has added only 100,000 square feet of new tenant-occupied space a year over the last five years,” the report says. “Those 100,000 square feet translate into just one large new commercial tenant a year for the whole city.”
....
According to BOMA, rising property taxes are the chief culprit in making it hard to keep commercial tenants downtown, let alone draw new ones. Tax increases are forcing both tenants and landlords to pay a significant chunk of their income in property taxes. “Chicago had the highest property taxes over the last ten years, with an average of $6.98 in taxes per square foot,” says the report. “This compares to $5.31 for New York, $2.78 for Dallas, $2.40 for Atlanta and $1.98 for Los Angeles. By far, Chicago leads the other cities in how much of a building’s income goes to taxes. Nearly 25 percent of a building’s income in the city goes to property taxes alone. In New York and Dallas, that figure is 12.6 percent. In Atlanta, 9 percent and Los Angeles 7 percent.”
....
In this regard, the report is aimed at Governor Blagojevich as much as Mayor Daley. It’s Blagojevich who’s resisting attempts to have the state pick up a greater share of educational funding—he doesn’t want to back away from his promise not to raise taxes, particularly on the eve of his reelection campaign against Judy Baar Topinka. The best bet for some sort of change will come after next fall’s election, when the newly elected governor has more freedom to act boldly.

“I don’t have a prediction for what will happen with property tax legislation,” says Vukas. “But it really worries me. People think these downtown buildings are cash cows. They don’t get it.”

Of course, the problem for Vukas and BOMA if Blagojevich wins while maintaining his "no new taxes" mantra is that he will cling to that soundbite like a shipwreck survivor clings to driftwood as the '08 Presidential race approaches.

The article also takes a look at the impact that TIF districts have on the overall tax burden, showing once again why The Reader is one of the best sources for in-depth public policy reporting. This week's round-up of the police torture scandal centered around Jon Burge is also a must read.

UPDATE: BOMA's study is here.

33 comments:

Greg 10:26 AM  

"Don't tax me. Tax that man behind the tree!"

Skeeter 10:30 AM  

How do you retain local control and local funding without funding the schools through the property tax?

I personally believe that schools should be funded from a central fund, but Republicans want local control.

Anonymous,  12:22 PM  

Skeeter -

Do it the same way Major League Baseball does it. Institute a 'revenue cap' on the rich well to do school districts.

Anything they spend over $xxx a year gets taxed (by the state) at y%, with the proceeds going to the poorest school districts.

Anonymous,  1:00 PM  

Good for you skeeter. God knows the Democrats in Chicago have done a great job with the public schools, how do you blame the GOP for that? Wait, I'm sure you'll find a way! LOL

Lovie's Leather 1:40 PM  

There should be a base-fund for schools. Each school gets $x-amount per student. Then the property tax should be used to subsidize the rest. If people don't want higher taxes, then the schools should have less money. Let's face it, you can double the amount of money that goes into the schools, but it won't do a thing. It will fatten the pockets of administrators as the school board gives itself a raise.... You need to have good teachers, and you need to use the money to keep the good teachers. If students have to use a 10 or 15 year old math book... who cares? How often does math change? The same with elementary science or reading. Keep good teachers and get rid of these "assistant administrators" and use the principals and the deans, who are already there, instead. This isn't likely.... Cutting bureaucracy from a school is about as likely as a Cade McNown NFL career.

Yellow Dog Democrat 2:08 PM  

Anon 12:22 --

What a terrible idea, and a political non-starter. You're never going to be able to tell parents they can't try to give their kid every advantage. Parents in Wheaton, Naperville, and Highland Park are going to continue spending as much as they can to educate their kids, and, quite frankly, that's their right. That's why I doubt that we'll everty completely remove school funding from some reliance on local property taxes.

The problem today is that we're over-reliant on property taxes, and 25% of the school districts in the state -- not just Chicago -- are struggling financially.

Local Democrats in Chicago are no more to blame for the fact that the state isn't paying it's fair share than local Republicans in Grayslake, Peoria, Springfield, or Marion. In fact, school funding and property tax relief are issues that cut across racial, partisan, and geographic divisions. Clearly, the Illinois Farm Bureau, BOMA, and many downstate Republicans get it.

If anything is to blame for the logjam in Springfield, it is parochialism among suburban lawmakers. I've always said that what separates Democrats and Republicans is that Democrats believe we're all in this together, while Republicans believe it's every man for himself. That's not completely true though, because rural Republicans understand how interconnected their communities are. You can't raise a barn, sow your fields or support a church by yourself, and in smalll towns, everybody is in everybody else's business all the time.

Suburban life is so fragmented, suburbanites are so isolated in their thinking, that they don't realize that the quality of public schools in Chicago and across Illinois affects them, even if they never set foot there. When kids can't read and can't get a job after high school, it affects them. When kids sell drugs because they can't operate a cash register and count back change, it affects them. When 57% of U.S. manufacturers say they have vacancies they can't fill because they can't find worker that are up to snuff, it's a problem, and when BOMA tells us that there are massive vacancies in downtown highrises because corporate America can't afford Chicago's high property taxes, that's an issue.

Maybe the folks in Oswego will get it when Chicago because the lifeless concrete graveyard to urban life that Detroit has become. Hopefully, BOMA will get through to Tom Cross before we reach that point.

Skeeter 2:45 PM  

Anonymous said...
"Good for you skeeter. God knows the Democrats in Chicago have done a great job with the public schools, how do you blame the GOP for that? Wait, I'm sure you'll find a way! LOL"

Are you claiming that public schools outside Chicago are great? All of those other public schools are outstanding? Is that what you are trying to say? What exactly were you trying to say?

Here's a hint: Try and have a point. "I hate Chicago" is not really a "point".

Here's another hint: Before you lecture somebody about school funding, take an English course. You writing is pathetic and it makes your argument ridiculous.

Anonymous,  2:58 PM  

YDD -

You are wrong. It is a good idea, and politically palatable. Who is going to vote against my plan? Every rich suburban rep in Springfield. Who will vote for it? Everyone else.

Who is there more of? Go ahead and count, I'll wait.

Lovie's Leather 8:12 PM  

Yeah... the public school money is stretched thin. But are we really too reliant on property taxes? Shouldn't the govenment be forced to be stretched thin? Citizens need to make sure the government gets the money it needs, not the money it "deserves." The government seems to be a neccesary evil.... But we need to make it more neccesary and less evil.

To go off on a tangent... recently a report came out that major cities aren't "ready" for another terrorist attack.... Well, what exactly is "ready?" Should we just allow the government to take all of our money to make sure that every city is "ready?" No, they should get what they need and not a penny more. When the government gets a penny more than they need... it is a penny that goes to waste....

muon,  11:31 PM  

I can respond to Skeeter's concern about local control and state funding. Let's also assume that there is a state stipend per student as suggested in the post by Lovie's Leather.

Municipalities retain control over their local road expenditures, yet they get state subsidies. The state pays a per capita rate to each municipality from the Motor Fuel Tax. But the municipality can choose from a variety of local uses: paving, sidewalks, snow removal, and parkway forestry to name a few. It's local control with state support.

A per student disbursement to districts can work on the same basis. Local control with state support.

Disgusted,  4:44 AM  

Not only on education, the Guv is taking a big time hit on AllKids. The director of Healthcare & Family Services was on WMAY in Springfield yesterday and the station was mobbed through two talk shows about his non-answers to very specific questions about 1. if children of illegals can be covered, 2. why the Guv's name and pic are on the FAQ handout and the application, multiple times and 3. How many kids are registered so far (it's about 2500, despite 100,000+ informational literature sent out. Hardly anyone is showing up to pre-registrations in Chicago, etc and those that do give the Guv's workers a hard time, mostly about the 1 year insurance-free waiting period.

Can any spokesperson for this administration give a straight, honest answer?

Skeeter 6:58 AM  

Disgusted,
Good point about the illegals. Like you, I hate it when we educate children of illegals. They don't deserve an education. We should keep them uneducated so that they can lead a life of crime or live in poverty. Moreover, if we educate them, then they might not want to take jobs that Americans refuse.

That is your point, correct?

Thanks for raising that issue.

Anonymous,  8:08 AM  

HAHAHAHAHAHA, love how angry and bitter Skeeter is, even when he's wrong all the time.

Anonymous,  8:10 AM  

Skeeter, why is your life so empty that you need to build yourself up here? Was your public education not enough to give you a happy life when you became an adult?

Anyway, I enjoy your rants, even though you really are an idiot.

Skeeter 9:11 AM  

Anon 1 and 2:

I note how you both failed to address the issue, i.e. the objection by some to educating illegal residents.

I enjoyed your rants too. If I had to defend an argument that said we should put foreigners in perpetual poverty, I also would change the subject. Nice work.

Extreme Wisdom 10:59 AM  

Skeeter asked:

How do you retain local control and local funding without funding the schools through the property tax?

EW replies:

Nothing is more "local" than parental control. Fund Children, not Districts, Systems, or other worthless bureaucratic fictions.

1. Abolish the Property tax for schools (60%+ cut for most Il Residents and businesses)

2. Pass HB750 Increases.

3. Convert Every school into an independent Charter managed by Principal, Teachers, & parents who choose the school.

4. Give every Illinois child a $7-7500 scholarship to use at a school of their choice.
__

Sure, a transition needs to be worked out, but there is no intellectually sound argument against the plan above.

Let go of your slavish support of the corrupt education industry/monopoly, and you'll see that the above plan offers the end of Illinois' vile "education apartheid."

But then, why REALLY help the disadvantaged, when you can continue sucking down obscene pensions & perks for the entrenched mediocrities of "Ed-Mart" (always the high price - always).

Anonymous,  11:27 AM  

Skeeter, let me know what you're doing to help anyone in poverty...I'll keep checking back for your answer, which you probably will not have.

cheers

Skeeter 12:11 PM  

Anon, 11:27 and prior:

Nice spin. Sure beats discussing the point, i.e. why it is good policy to deny an education to the children of illegal aliens?

I also will keep checking back, but I don't expect any response.

Extreme Wisdom 4:06 PM  

Skeeter,

Our current education system denies an education (a good one) to 10s of 1000s, but as long as the money flows to "Ed-Mart" (always the high price - always), it doesn't seem to bother many on your side of the aisle.

Regardless, your question is a good one.

Try this thought process on for size.

1. The Federal Gov't has abdicated it's role in defining "legal," but if they did, then the State would determine what was legal and what wasn't and enroll accordingly.

Again, the concept of Funding Children, and not systems, is superior.

Legal parents (defined by Federal immigration status) get a scholarship for a school of their choice, and illegal parents don't get a scholarship.

Hence, an incentive to be "legal."
___

Also, you raise an interesting philosophical point with your question.

You appear to lean in favor of an expansive answer - allowing all children an "education".

Is there any end to your largess? None of us want kids to suffer, but you have to admit there is a cost. Is there a limit in your view?

If we "tax the rich to feed the poor until there are no rich no more..." what will you do when there are no more of the "rich."

Lenin, Stalin, Gorbachev, Mao, and PolPot await your answer. Chirac might be interested as well. Maybe you can pull off where they failed.

Skeeter 5:14 PM  

EW:

Are you claiming that providing an education to the child of an illegal immigrant is the equivalent of the actions of Pol Pot or Stalin?

Are you claiming that Chirac is the equivalent of Stalin or Pol Pot?

With comments like that, it is impossible to take seriously any of your other statements.

Extreme Wisdom 8:05 PM  

Skeeter,

Not at all. I'm saying that I understand where you are coming from, and think that it is problem that needs to be addressed.

As for Chirac, of course he isn't on par with Stalin or PolPot. Perhaps I could have used a better transition.

The basic problem is that the same though. The Welfare State, whether a totalitarian version or a democratic one, isn't sustainable.

I hope this clarifies things

Anonymous,  7:49 AM  

Extreme,

Would you simply place the $7K in individual's hands?

How would you ensure it is spent on education?

Anonymous,  8:21 AM  

Skeeter...why are you so bitter? Old lady not keeping the home fires going?

Extreme Wisdom 9:15 AM  

Anon 7:49,

First, let's be clear. The massive abuse of "end-of-career" bonuses, the consequent pension debacle, the payroll bloat caused by purchased “mandate” legislation, the massive administrative waste, etc. etc. etc. ISN’T BEING SPENT ON “EDUCATION,” and every one knows it.

Spending on "education" is what you do when the money connects neurons in a child's head. My idea guarantees MORE money will be spent on "education" because it will be a family that directs the spending - not a bureaucracy.

[Supporters of School Choice should never fail to point this out.]

That said, your question is a valid one. The "spending" would be in the form of a scholarship that must be redeemed at an educational institution or for education services (tutoring, supplemental testing assistance, Community Colleges)

Another feature would be that any difference between tuition and the $7-7500 could be invested in education savings accounts for college as well.

Illinois is approaching the $8,500 per student mark (statewide).

[BTW, that difference/savings ($8500-7000) can be spent on shoring up Illinois’ massive pension shortfall.]

Leaving aside the issue of gross payroll bloat and perks in rich districts contrasted with lack of REAL resources in poor ones - that $8500 figure represents enough money to provide every kid (anywhere) with a decent education AND a bit of college savings.

The fact is that the current system is so fraught with waste and bloat that tearing it up will provide all the money we need to educate Illinois kids.

It's time to devise an education system that works for the Illinois kids and for Illinois citizens, not the corrupt education industry. The rapacious slobs in the protected education monopoly have had a 10-20 year turn at the trough, and it's time to cut them off and put them a diet.

Fund Children, not Bureaucracies.

Anonymous,  10:12 AM  

Extreme,

I certainly agree that much of the expenditures categorized under "education" are not going towards education.

However, won't your system create another bureaucracy? (Assuring the institution of choice is allowed, monitoring the "remainder" investments, etc.)

Also, what is to prevent the private schools from misspending (bloated salaries, etc.) as well? I don't see a very good track record when public funds are diverted to private enterprise, e.g. Halliburton, the medical profession, etc.

Extreme Wisdom 12:28 PM  

Anon 10:12,

The "another bureaucracy" argument/question is a strange one, in light of the fact that my plan (see above) calls for eliminating 892 districts. (all valueless bureaucracies)

Of course, you are correct that my plan would call for new administrative functions, but why does that mean a "new bureaucracy" must be created.

The way I envision a choice system, there would have to be a number of people employed vetting residency issues, inspecting schools (including the new and dynamic ones that would pop up), and other matters of oversight.

These are all functions that could be met with a net decrease in the number of total "adminstrative" employees - which is the real issue.

We have towns, counties, regional education districts...etc etc etc...all of which would be reorganized into a system that

Funds Children, Not Bureaucracies.
___

As an aside, people should take note of various "default" positions of defenders of the status quo.

No one ever gets let go. No Bureaucracy is ever "cut", it can only grow.

There is never a re-definition or a reform of existing functions - there is only "new hiring."

This is mind-set that needs to be dropped - and attacked until people drop it.

Extreme Wisdom 12:41 PM  

Anon 10:12,

Re: "Misspending, bloat, & Haliburton."...

First, take note that the money isn't going to "private" Halliburtons, but directly to parents. Most will choose their local school - which will be independent charters capable of innovation and change.

Every parent will be a better judge of waste, quality, talent, and output than the current system, which is failing far too many people to warrant anymore support.

Regardless of the moniker 'Public Schools', the fact is that forced taxation, purchased legislation re:

*certification requirements

*political protection from competition

*bloated compensation schemes

*churning of bonds, public finance...etc.etc.etc.

are all proof that there is NO FUNCTIONAL DIFFERNCE between Enron, Haliburton, and The Public Education Industrial Complex.

In effect, the entire Public Education Industrial Complex is already "privatized" to benefit the interlocking public and private entities that make it up.

If you care about education, you'll support funding children, not bureacracies.

Skeeter 1:36 PM  

EW,
Why should my tax dollars go to support your religious schools.

If a school was set up by an extremist Muslim group [sim. to the religious schools in Saudi Arabia], would you advocate that parents be allowed to spend our tax dollars at that school? How about a school run by Pat Robertson?

Extreme Wisdom 2:07 PM  

Skeeter,

That is a canard, and you know it.

The Supreme Court has already decided the issue in favor of choice, finding that the intervening step of funding parents takes care of any 1st Amendment issue.

To the extent that society agrees that it should support "an educated populace," my plan is superior to the existing corrupt system by any standard.

Your "Saudi Robertson" scenario is weak as well. You are ignoring the fact that the vast majority of people will continue to utilize improving public schools (charters) that will reflect the values of the people who choose their schools.

To the extent that some may send their kids to sectarian schools, I guess it comes down to who trusts people, an who trusts government.

I'm willing to trust the people's judgment over the idiots who currently manage our awful schools.

The current system is just as aggressive at promoting a "value system" as any religious school.

Why should I be forced to fund their imposition of values? They certainly aren't succeeding at "education."

It's time to stop using absurd & extreme scenarios to defend the indefensible. My system will provide a better education for more people for less money.

Any intellectually honest observer cans see that.

Skeeter 2:15 PM  

I don't find my view dishonest at all, and frankly, this would not be the first time that I disagree with our Supreme Court.

We look at the issue differently. I am more comfortable trying to save the public schools because I believe that schools should teach math and churches should teach religion.

I am very uncomfortable with any tax money going to religious schools, and my example is right on point.

Admittedly, most private schools (at least in the Chicago area) are Catholic and most of those schools do provide a quality education. If my wife and I have children, I would expect my children to attend one of those schools -- at my expense.

However, would stop people from using tax dollars [as proposed by you] for a school run by religious extremists?

Are you then going to get into the business of judging the merits of the private school? Are you going to say "This private school has these religious views which are consistent with democracy, but that school does not"?

How do we block the Saudi example, which is what happens in the real world where there is no public education?

Saudi Arabia is what happens when we abolish public schools. Why should something different happen in America?

Extreme Wisdom 11:19 AM  

Skeeter,

I don't know where I called your view "dishonest," (though "canard" was a poor choice of words on my part).

I did think the "Saudi Robertson" scenario was "misleading."

So is saying that I'm for "abolishing" public schools.

Frankly, what we have here is a difference in ideology.

I'd be willing to let people decide the best way to educate their kids - knowing full well that some will make poor decisions. (the current system makes 1000s of poor decisions, BTW)

You would seem to like some sort of "guarantee" that they won't utilize scholarships to send their kids to some sort of "madrassa."

Fair enough.

This is the type of stuff that needs to be addressed by legislation and citizen involvement.

Obviously, any school capable of redeeming scholarships must meet some set of standards, and that debate is where the rubber will meet the road.

I'd be arguing for maximum parental freedom while allowing that some content will have to be prohibited.

This should allow for scholarships to be used in the majority of religious schools, but will probably call for the codification of some limits on "hate" in curricula.

The fact is that the vast majority of people will choose their newly de-regulated public/charter school, and those schools will improve dramatically when freed of absurd mandates.

I default on the side that offers a BETTER education for MORE people for LESS money.

My plan (soon to be re-released on my website) does that. The current system is incapable of doing that.

Skeeter 7:19 AM  

EW,

So under your plan, you are going to look at the religious teachings of the school to determine if they qualify as "hate"?

That doesn't sound good for either schools or religion.

It sounds easier to reform the public schools. I note that most of the prolems arose in our 20 years with a Repub. gov. in Illinois.

Extreme Wisdom 3:24 PM  

Skeeter,

Public schools are beyond reform, as the system is hopelessly corrupt.

Further, public schools across the nation saw the same obscene run up in spending, and collapse of standards - it wasn't just Illinois.

Blaming Illinois' craven Republican Party doesn't cut it.

The blame for our failed school system lies with anyone who blindly supported (and still supports) "public education" while ignoring the Enronesque waste and fraud that permeates the Industry.

That means virtually everyone is to blame, and it won't get better until everyone wakes up.

You talk about "religion" while ignoring that the "education industry" operates similar to a religion itself, complete with a "certified" priesthood and "worshipers" who refuse to question their "beliefs".

Just for fun, propose a workable "reform."

As you might guess, I'll reject anything that starts with "more money," as that has been done for over 7-80 years straight.

More money for a failed system must be rejected out of hand.

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