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Senate Bill 1, introduced in the 88th General Assembly January 13,1993 by Senator Philip, would amend the State Mandates Act to exempt the Property Tax Extension Limitation Act. It would amend the Property Tax Extension Limitation Act to make the Act applicable to all taxing districts in Illinois, including taxing districts that are home rule units. It would also be effective upon becoming law. Excerpts From Testimony Presented By Ted Flickinger, Executive Director The following testimony was presented January 26, 1993, in Room 400 at the State Capitol, to the Senate Executive Committee: Chair Sen. Karpiel, Vice Chair Sen. Dudycz, Sen. DeAngelis, Sen. Geo-Karis, Sen. Klemm, Sen. McCracken, Sen. Philip, Sen. Watson, Sen. Weaver, Sen. Severns, Sen. del Valle, Sen. Demuzio, Sen Hall, Sen. Jones, Sen. Vadalabene. [NOTE: The Executive Committee limited testimony to five minutes.] Madame Chairman and members of the committee, I represent nearly 2,100 locally elected park board members, more than 43,000 employees and tens of thousands of citizens who volunteer their services for children, teens, and senior citizens involved in programs and services offered by park and forest preserve districts. These citizens and our association are adamantly opposed to Senate Bill 1. Park and forest preserve districts are charged with — I'm sorry, we are mandated, to acquire open spaces, playgrounds, parks, wetlands, and natural areas — all of which have a positive impact on the local and state economies as well as the quality of life for all Illinois citizens — yet, because of the restrictions of this legislation on our bonding authority, park and forest preserve districts will not be able to make infrastructure repairs or acquire land or obtain sufficient funds to match grants offered by the state and federal governments. During the last two years, we have presented a number of position papers, and magazine, as well as newspaper, articles on the negative impact of the tax cap legislation in the five collar county areas. In addition, I invite each of you to read the recent report prepared by the Northeastern Illinois Planning Commission titled "Greenways and Tax Caps—Two Worlds in Collision." The report recognizes that the Property Tax Extension Limitation Act, at the outset, represented no threat to open space acquisition and development, providing that the corresponding tax levies stayed in line with those of previous years. But the new Act did far more than impose a cap. Park and forest preserve districts in the collar counties were shocked to discover that their authority to raise capital by floating non-
Illinois Parks and Recreation 6
January/February 1993
referendum general obligation bonds had suddenly vanished. The report emphasizes:
The issuance of bonds is a rational and widely used method for financing
capital improvements, a method employed by virtually all governments, including
that of the State of Illinois. Collar county park and forest preserve districts, among
others, were told to discontinue the practice unless they could pass a bond
referendum. For many districts, the new law threatened to reduce overall revenues
by 30 percent or more. The so-called cap was seen by many as a virtual prohibition
on capital spending even for purposes required under other laws or for which federal
and state matching grants were available.
The tax cap law was widely promoted on the basis of two "understandings." The first was that the law would only limit increases in tax extensions by non-home rule governments in the collar counties. It proved to be far more restrictive than that. The second understanding was that tax caps would be a temporary measure, to be replaced by more thoughtful and comprehensive tax reform legislation which would presumably address such issues as equitable funding for public schools. If relief from the ban on non-referendum bonding by collar county districts must await full scale tax reform, the collar county districts and the regional greenway plan for northeastern Illinois are both in serious trouble.
If Senate Bill 1 passes, all park and forest preserve districts as well as open space programs across the State of Illinois will be in jeopardy. Finally, I would like to bring to the Executive Committee's attention that Senate Bill 1925, which passed in the Senate by a margin of 36 to 16 last spring session, identified the bonding authority concerns for park and forest preserve districts. The language in Senate Bill 1925 could serve as the amendatory language to Senate Bill 1. The people of Illinois are looking for property tax relief. Tax relief can be realized for property owners without destroying the ability of local government to function in a responsive, effective manner to local taxpayers. Unfortunately, this proposed legislation assumes that all units of local government are the same. Of course, this is not the case. Park and forest preserve districts rely solely on property taxes as a tax revenue source. They receive no tax revenues from sales taxes, motor fuel taxes or local utility taxes. They also receive none of the proceeds from the income tax surcharge. Even in terms of property taxes, all local governments are not the same. Some have significantly greater taxing authority than others. This legislation proposes to restrict the taxing ability of park and forest preserve districts that comprise an average of 5% of the property tax bill in the same manner that it proposes to limit the taxing ability of the local governments that comprise 66% of the tax bill and have other tax revenue sources. To cap levies for expenses over which a local government has no control is unreasonable. For example, the state and federal governments mandate payment of such essential items as workers' compensation, social security and unemployment insurance. These are expenses in which the local government has no way to contain costs. And yet, we don't know completely the financial impact of the Americans with Disabilities Act. The tax cap will not work as it is currently proposed. We appeal to you to consider our dilemma in our efforts to serve the residents of Illinois. Peter Murphy, General Counsel for the Illinois Association of Park Districts, and I will meet with you individually at your convenience. Thank you for giving us this opportunity to express some of our concerns. Property Tax Cap Checklist page 8
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