A study by the Illinois Economic Policy Instituted, a group I dmit to neer having heard of, has issued a report on property tax relief.

Perhaps of interest locally is its section on township government.

Here is the graphic that drwe my attention:

The authors are

• Frank Manzo IV, MPP Policy Director Illinois Economic Policy Institute and
• Robert Bruno, PhD Director and Professor Project for Middle Class Renewal University of Illinois at Urbana-Champaign

Their summary about township consolidation follows:

The state could also reduce administrative costs by consolidating townships.

• While Illinois’ 1,431 townships account for 24 percent of all local government units, they only receive 2 percent of all property tax revenue.
• Township consolidation could reduce the average property tax bill by 0.4 percent.
• The net economic impact of consolidation is small– a growth of $11 million and a gain of about 100 jobs.

Here is the text:

Consolidation of Townships

Illinois has 1,431 townships across 102 counties (Census, 2019). The number of townships varies considerably from county to county. Cook County, for instance, has 30 townships that provide services to nearly 2.0 million households. Nearby LaSalle County has 36 townships for 44,448 households. In 17 counties, like rural Calhoun County where 1,881 households reside, there are no townships. For a complete breakdown of townships in each county, please see Table B in the Appendix.

The State of Illinois could pass legislation to consolidate townships by limiting the number of townships that can exist within each county.

A 2016 University of Chicago study on the potential consolidation of Zion Township and Benton Township in Lake County found that the merger would produce a 15 percent savings compared to current budgets.

The savings would accrue from

• combining physical office space
• decreasing administrative costs, and
• reducing personnel (Bent et al., 2016). Another recent study that evaluated a 2008 reform in Indiana that consolidated tax assessors found a 19 percent to 27 percent cost savings (Krupa, 2017).

However, while Illinois’ 1,431 townships account for 24 percent of all local government units, they only receive 2 percent of all property taxes (TFI, 2019).

The possibility of merging school districts is also included in consolidation proposals. A 2011 report by the Center for the Study of Education Policy at Illinois State University on school consolidation found that “while consolidation reduces costs in the short term, these reductions are replaced in the long term with new expenditures, such as expanded administrative, supervisory and specialized staff.”

[For analyses relating to consolidating Crystal Lake High School Distirct 155 into a unit school district with its underlying grade school districts, see

• Considering Consolidation of High School Distrcit 155 with Feeder Grade Schools and
• Continuing Discussion on School Consolidation

” It also concluded that as district size increases, educational achievement decreases for low-income students (Durflinger & Haeffele, 2011).

To assess the impact of township consolidation on property taxes, data was obtained on the average effective property taxes in each county.

The “effective property tax” is the average annual property tax payment divided by the average home value.

In Illinois, the average effective property tax statewide was 2.23 percent of the home value in 2018, about double the national average (SmartAsset, 2019).

[Including Chicago and Cook County figures in the total means the higher effective tax rate in the collar counties does not make the report.]

This information was analyzed in a common but advanced statistical technique called a “regression,” which estimates the independent effect that a township has on property taxes after accounting for other observable factors. Regressions describe how much a variable is responsible for an outcome.

On average, each additional township is statistically associated with a 0.01 percentage point rise in the average property tax rate, as a percentage of assessed home values (Figure 10). This effect is statistically significant with 95 percent confidence.

Merging one township with another would reduce an average homeowner’s property taxes from 2.23 percent to 2.22 percent.

For a family with a home valued at $200,000, this would reduce their annual property tax bill by $20 from $4,460 to $4,440, a savings of 0.4 percent. The analysis accounts for the average household income, the total number of households, and the geographic location of each county (Figure 10).

It reveals that more affluent counties tend to have higher property tax rates, which is likely due to their greater ability to pay. Conversely, the more populous counties tend to have marginally lower tax rates, which is likely due to the economies of scale associated with providing services to households in dense areas.

Finally, the analysis accounts for the fact that Chicago and its surrounding suburbs have higher property tax rates, on average, than those in the middle of the state, while southern counties tend to face slightly lower tax rates.

Many townships impose two levies in the property tax bills of Illinois homeowners.

One portion of the tax is for the township and its administration while the other is for its road and bridge district.

The State of Illinois could mandate or incentivize the consolidation of townships to save on administrative costs while maintaining the current level of funding for roads and bridges so that residents would not experience reduced investments in local infrastructure (PTRTF, 2019b).

Assuming a 20 percent reduction in the total number of townships, annual property taxes would decrease by $61, or 1.2 percent, for the average homeowner in Illinois.

The economic impact of township consolidation is an $11 million increase in economic activity and a net gain of 106 jobs.

The consolidation of local units of government can reduce administrative costs, but it would not yield large amounts of tax relief for the average Illinois homeowner (Figure 11).