Jane Grover: The question of separate taxing bodies

Creating a separate taxing body, whether for the libraries or recreation (as in Wilmette), or a community mental health board, doesn’t necessarily lead to increased taxes. And while we have an excess of taxing bodies in Illinois, the separate existence of a taxing body increases the expectation of transparency and accountability for that entity’s levy and budget. 

 
Using the Evanston Mental Health Board (MHB) as an example, in November 1968, Evanston voters approved submission of a referendum to create a community mental health board, empowered to levy taxes and expand mental health services in Evanston. The referendum passed on April 1, 1969, forty years ago this week. Evanston was the first Illinois municipality to create a “708 Board”, named for House Bill No. 708, which authorized the creation of community mental health boards. 
 
The MHB’s levy was capped at a 1 mill of the equalized assessed value of taxable real estate in Evanston. The MHB appeared as a separate levy on property owners’ tax bills, reminding taxpayers twice a year of the existence of the MHB and its responsibility as a steward of taxpayer dollars.  
 
In 1983, the Evanston City Council, exercising its home rule authority to levy and collect taxes, passed the Fund Consolidation Ordinance to simpify the City’s revenue accounting. Ordinance 109-O-83 folded the mental health tax levy – and the City’s insurance, retirement, library, and recreation funds – into Evanston’s general revenue fund.  Prior to that, revenue from the mental health tax levy (never more than 0.1%) was recorded in a separate fund, administered directly by the MHB. 
 

Separately levied, the MHB’s budget was statutorily capped at 1 mill, which increased only as the EAV of Evanston’s taxable property rose. After fund and budget consolidation, however, the MHB budget has had both incremental increases and significant cuts, while its share of the City’s general revenue fund has declined. 

 
Bringing the MHB budget into the general fund has resulted in reduced allocations, but one can argue that the process is less apparent and transparent than when the MHB’s levy appeared separately on everyone’s tax bills, rather than existing deep in the City's budget. 

 
Jane Grover
janegrover7thward@comcast.net
www.janegrover.org

Comments

     The current total Evanston library budget is a little over $5M for 2009-10, or about $67 per Evanston resident, $169 per household. However the libraries generate almost $300,000 in fees, fines and other revenue, and also are responsible for $90,000 in annual revenue from the state of Illinois, so the net general fund cost is actually only about $63 per Evanston resident for the entire library system. Most of that is attributable to the main library and central services.
     Undoubtedly there is some additional HR, legal, and finance overhead attributable to the libraries, but I have not seen any costing-out of that by any candidate, staffer, or commentator here.
     The 2008-09 budget showed less than 6 FTEs allocated to the two branch libraries. It's impossible to tell how that changed for 2009-10 because the published website version of the budget omits any line item FTE count as existed in the 2008-09 version, but that's true for all departments.
     Lines 2825 and 2830 in the 2009-10 budget for the North Branch and South Branch combined in 2009-10 are budgeted at $405,000 – a 15% decrease from the actual 2007-08 appropriations. Against that must be offset the nearly $30,000 in rental revenue generated by the North Branch.
      The combined branch library expense comes to $13 per household, less than 6 bucks a resident.
     The branch libraries amount to less than 1/2 of 1% of City expenses. They generate over 130,000 patron-visits annually, a utilization that could be increased with some outreach. Their impact on the budget is tiny, and would be so even if they had no value whatsoever -- but clearly they provide value to patrons and to the larger community. I would also estimate that a majority of visitors to the branch libraries combine that trip with other visits to the shopping district, generating sales tax and parking revenue.
     Yet year after year the branches are made the whipping boy for city expenditures, and the threat of their closing used to justify hikes in taxes and/or fees and/or fines.
     It was to stop this regular nonsense that some of us have proposed at least exploring the idea of a separate district. State law specifically allows for such an entity, and in fact hundreds of library districts operate successfully in Illinois.
     As one student researcher concluded, "Independent library districts can return libraries to the center of the community. And in doing so, create stakeholders of the community.  Independent tax districts are an excellent way to restore consistent, stable funding and community services for libraries."
     One regular writer on libraries, opposing the move toward consolidation into larger governmental units, wrote, "Small libraries must allow a truncated staff to do nearly everything, which leads to autonomy for creative thinkers and a very quick separation of effective workers from those who are not. It means unleashing innovation, taking risks, and tapping local civic pride to get support in kind and in dollars from sources other than taxes."
     Special districts can be inefficient -- in fact, the mosquito abatement districts have been singled out as a prime example of that. But the suggestion that fewer governments automatically leads to more efficient government has been studied and refuted. On the contrary, with bigger, consolidated government, “governments become more remote from voters and more accessible to spending interests, which naturally tends to increase expenditures in the longer run.” Government Consolidation in Indiana, Separating Rhetoric from Reality.
     Obviously, there is a question of overhead. But a revenue-sharing or other agreement between a library district and a municipality could deal with that. And, of course, the city budget and taxes would decrease.
     It is not an idea I am wedded to. I would like to investigate how it's working out for towns like Geneva, Franklin Park, and La Grange Park. The economics may or may not work for Evanston. But the advantages of political independence from ritual threat to something the community loves are undeniable.

Jeff - are you opposed to the idea of a separate North Branch district?  Whose taxing area might just be the 6th and 7th wards? 
We don't need people from the 8th ward telling us how to run the North branch, since Ann Rainey wants to cut it.
 

I hadn't thought at all about a separate north branch district, Junad, although I suppose the Ridgeville Park District would be a parallel concept. Right now the three library facilities share some common infrastructure that might be difficult to disentangle.