The tangle of local government adds hundreds of millions of dollars to tax bills in Illinois and tens of billions nationally, money that could be returned to taxpayers if their number could be reduced, said Jack Franks, a Democratic state representative who chairs an Illinois legislative committee formed to consider local-government mergers.
Their presence defies political stereotype. The top five states in terms of most local governments per resident, including the Dakotas and Kansas, all reliably vote for Republican presidential candidates.
The year after Reagan’s inaugural swipe at the public sector, the census counted 81,780 units of local government, including school districts. Last year there were 90,056. Illinois, the fifth-most-populous state, has by far the most. Texas ranks second, Pennsylvania third and then California. Those four alone have more than 10,000 special districts.
In the past half century, a new government was created in the U.S. every 18 hours, said Christopher Berry, an associate professor of public policy at the University of Chicago who wrote “Imperfect Union: Representation and Taxation in Multilevel Governments.”
“Any one of these looked at in isolation doesn’t look like a problem -- but when you have so many thousands of them, that adds up to really consequential numbers,” Berry said. “People don’t think about special districts as a place to cut because most people don’t even know they exist. The persistence of them speaks to their invisibility.”
In Illinois there is plenty of material to work with -- 102 counties, almost 1,300 municipalities, about 1,400 townships and 900 school districts, along with the more than 3,200 special districts.
Growing Collections
Special purpose districts in Illinois took in $2.9 billion in 2011, up 32 percent from 1999, according to state records. That growth is eight times the increase in the state’s population. That figure doesn’t include four large Chicago-based agencies such as its transit authority.
As the number of special districts and their budgets has grown, federal spending dropped in the past two years, adjusted for inflation and excluding entitlement obligations such as Social Security and Medicare, according to U.S. Commerce Department data. Combined state and local spending rose from 2006 through 2009 before turning down over the past three years in the aftermath of the biggest economic downturn since the Great Depression, except for state-funded entitlements such as Medicaid.
State and local levies, including the property taxes that support schools, consume 9.9 percent of the average American’s income, compared with 10.2 percent in Illinois, according to the Washington-based Tax Foundation, a nonprofit that favors a simpler tax system. American households pay 17.8 percent of their income, on average, to the federal government, according to the nonpartisan Tax Policy Center in Washington.