Prior to his employment at Amoco, Mr. Johnston served as an economist with the RAND Corporation, the Institute for Defense Analyses, and the Secretary's Office of the U.S. Treasury. He served on the U.S. delegation to the United Nations Conference on the Law of the Sea.
Mr. Johnston's current research has focused on electric utility deregulation in Illinois and other states; pollution trading under the climate change treaty, Clean Air Act, and the RECLAIM system for the South Coast Air District; and a general theory of regulation, published in the Cato Institute's Regulation magazine.
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I am not a happy camper. I live in Wilmette, Illinois. School District 39 in the village where I live is facing a $5.5 million deficit this year. To offset the deficit, a property tax increase amounting to $6.4 million is proposed with the prospect of more tax increases in subsequent years because of increasing deficits.
The Board of Education promises not to raise taxes in future years, even though it will have the authority in the present proposal. It reminds me of presidential candidate George H.W. Bush’s pledge of “read my lips, no new taxes.” He reneged on his promise after he won the election.
Last year the geographically overlapping New Trier (secondary) School District floated a $174 million bond issue that was defeated with 63 percent voting against it. Despite this recent experience, another increase is being proposed by District 39. It is clear that the school boards are not getting the message being sent by the taxpayers.
It is time to cut the budget. One place to start is for families of the students to pay the full cost of their extracurricular activities.
A little economic advice to the school districts would seem to be in order. Taxing group A to pay for services bestowed on group B is not a mutually beneficial exchange. In former times, the taxpayers without children in public schools tacitly agreed to pay for the education of public school children because the quality of the schools was captured in local property values. But property values are declining on the North Shore of Illinois where these school districts are located.
For example, the market value of my house, according to Zillow, has gone down by a third since the recession began. Yet the total property taxes and those for the schools have continued to increase, and with the new bond issue, they will increase even more. It is clear that the overall value of local schools is not going up, even though the tax price is increasing.
This is not a stable situation. The incumbent school board members and the bond issue will, in all likelihood, fail at the polls. If not, the unjustly taxed will move to other jurisdictions.
Jim Johnston (email@example.com) is an economic advisor to The Heartland Institute.