I wanted to share a little back-of-the envelope calculation with you. The Chicago Public Schools receives about 40% of its revenues from local taxes, about 31% from the state, and about 24% from the federal government. The CPS receives that much money from the state and federal government largely because so many of the children enrolled are from poor families.
The total budget for the CPS is about $6.6 billion. That means that just about $2 billion of its revenues come from the state of Illinois.
The amount that Illinois received in income taxes was about $13 billion. That was up about 32% from 2010 after an increase in the income tax rate of 66%. I don’t think that bodes particularly well for future income tax increases as a means of generating additional revenue for the state but that’s a subject for a different post.
About 20% or $2.6 billion of those state income tax revenues comes from the city of Chicago.
Here’s my point. Unless Chicago is receiving a lot of money for something else from the state, enough to offset the difference and the other funds that Chicago sends to Springfield, I don’t see a big windfall to Chicago from the state of Illinois.
It’s also worth noting that the city of Chicago serves as a place of employment for many that do not live in the city limits. This makes it the ‘economic engine’ for the suburbs (who work in Chicago but report income tax revenue in their residences). If every building and structure within the city limits were to disappear, more than $2.6 billion in state income tax would disappear. So that $2.6 billion figure doesn’t capture what the city really contributes to the state’s bottom line.
I’ve got no reason to dispute the figure, and don’t really participate in the internecine conflict between the different parts of the state, but I think a large part of the story here is that the state budget is a mess and the state has taken advantage of its ability to re-direct some of the money it collects to be distributed to local government to its own needs. It seems like all city, county, school, park, and township governments are receiving less from the state each year.
You mentioned the Chicago teacher’s pension fund yesterday. The State used to contribute 23.2 percent of the money that went into the fund. Now, it’s 0.4 perecent. I don’t think that’s an abberation directed at Chicago, and I don’t think it’s because Chicago is not wholly represented in the budget decisions.
http://blogs.chicagotribune.com/news_columnists_ezorn/2012/07/pension.html