The Township Referendum is a Poverty Referendum

Restoring Champaign’s safety net for the poor

Would you vote “Yes” for a tax increase if you didn’t know what it was for? If you live in Champaign, this is exactly what you’ll be faced with on Election Day unless you read on. If you don’t vote “Yes” you may regret it once you understand what’s at stake.

On Election Day, November 4th, Champaign voters will be asked to vote on the following referendum:

“Shall the limiting rate under the Property Tax Extension Limitation Law for City of Champaign Township be increased by an additional amount equal to .02% above the limiting rate for levy year 2007 and be equal to .0550% of the equalized assessed value of the taxable property therein for levy year 2008?”

Unless you educate yourself beforehand, just the first four words will be enough to throw you off. What’s a “limiting rate,” let alone a “Property Tax Extension Limitation Law” or “equalized assessed value,” you might wonder. Yet it’s crucial to understand and make an informed vote on this referendum – only a “Yes” vote will help restore Champaign’s threadbare safety net of last resort for the city’s poorest, most vulnerable citizens.

Though it’s far from clear in the referendum’s wording, the increase requested is quite small - about $10 for a home with a market value of $150,000, which is roughly the median home value in Champaign. Since “equalized assessed value” is essentially 1/3 of market value, the calculation here is ($150,000/3) * .0002 = $10. By comparison, the same homeowner would pay about $3300 in property tax overall, about half of which goes to the school system. The Champaign City Township’s current share of overall property tax is tiny, less than one half of one percent.

If the referendum passes, Champaign City Township Supervisor Linda Abernathy will target the additional funds to help reverse drastic cuts that had to be made in a financial aid program for the poorest of the poor called “Township General Assistance.” This state-mandated program is the primary function of Abernathy’s office. It provides financial assistance to Champaign residents who are living in abject poverty (typically less than $3000 in annual income) and who also don’t qualify for any other state or federal aid. The maximum monthly aid under this program is typically around $225, although currently the maximum is $150 in Champaign due to a lack of funds. In fact, the funding shortfall is so severe that Abernathy had to completely cut off more than half of the program’s clients last year, a desperate situation that prompted the upcoming referendum.

CHAMPAIGN’S CRITICALLY FRAYED SAFETY NET

How did things get to such dire straits? There is a long and complicated history here, but it’s mainly due to a combination of three conditions:

First, Illinois townships are typically funded almost entirely by property taxes, but Champaign City Township’s funding tax levy is artificially low - radically lower than comparable townships in the state. For instance, while Champaign’s 2007 levy stands at 3.5 cents per $100 equalized assessed value of property, Urbana’s levy is about 5 ½ times higher, at 19.17 cents. The result is that in Champaign, only $105,916.62 could be allocated to Township General Assistance, while Urbana had $462,382.90. Factoring in the difference in population (2000 census figures are 67,518 for Champaign, 36,395 for Urbana), the result is that Urbana is able to fund Township General Assistance at more than 8 times the level of Champaign (462,382.90/105,916.62 * 67,518/36,395 = 8.099).

Among all comparable townships in a 100 mile radius of Champaign, Bloomington City Township is probably the most similar, being also the larger of “twin” college-town cities (Bloomington/Normal) with nearly the same population as Champaign. Bloomington’s levy is 22.1 cents per $100, well over 6 times higher than Champaign. This allows Bloomington to allocate $1,000,010 toward Township General Assistance. Even after factoring in the difference in population (Champaign is slightly more populous), it turns out that Bloomington is able to fund Township General Assistance at more than 9 times the level of Champaign (1,000,010/105,916.62 * 64,808/67,518 = 9.063).

Champaign City Township’s profoundly inadequate tax levy is a legacy of years prior to Linda Abernathy’s tenure as Township Supervisor and it’s regrettably been stuck there ever since, due to “property tax caps” (more on that below).

The second contributing factor is that in recent years there has been a significant jump in demand for Township General Assistance in Champaign, largely due to Abernathy’s efforts to better serve the poor by being more receptive and helpful, fulfilling a campaign promise made when she originally ran for her office in 2005. For a while, Abernathy was able to meet the previously hidden need in Champaign using reserve township funds, but as those funds dwindled, the artificially low property tax levy began to severely strangle Township General Assistance funding.

The third and most consequential factor in the current predicament is the enactment of PTELL, the Property Tax Extension Limitation Law (commonly known as “property tax caps”) at the county level back in November, 1996. PTELL acts to set hurdles that must be cleared to enact property tax increases. In the Township’s case, PTELL’s hurdles are prodigious. Not only must increases (beyond normal inflation) in the tax levy be approved by voter referendum, the wording on the ballot may not provide any indication of the levy’s actual purpose. It may only indicate the magnitude of the increase in a strict, pre-determined boilerplate format imbued with technical jargon. The upcoming referendum’s arcane wording (cited above) is expressly dictated by PTELL.

A YEARS-LONG BATTLE

Since PTELL requires that voters be asked for a tax increase using perplexing technical language with no indication of what the funds will actually be used for, it should come as no surprise that a prior attempt to pass a similar referendum failed decisively. The last attempt, in November 2006, asked for an increase of 5 cents per $100 of equalized assessed value, which would have fully funded the Township General Assistance program (the upcoming referendum only asks for 2 cents per $100 in the hopes that the lower figure may pass this time around). Since the failed referendum, there have been efforts to educate the community about this issue. In addition, through a grassroots effort of Champaign citizens, an advisory referendum was placed on this past Spring’s Primary ballot to educate and directly gauge the support of Champaign voters regarding the restoration of Township General Assistance aid to the poor. The referendum wording was:

“Shall the voters of the City of Champaign Township ask the Township Trustees to restore the level of general assistance funding by actively pursuing any and all means available to them in order to preserve the health and well-being of individuals, children, families and adults living in extreme poverty in our Township?”

This passed with 71% in favor, showing that when Champaign voters are told what they’re voting for, they are in support of restoring this aid to the city’s poorest residents.

AN INCREASINGLY URGENT NEED

The need for Township General Assistance will likely become even more urgent in the coming months. A sharp increase in local unemployment (from 4.3% in April to 6.7% in August for Champaign County) coupled with ongoing hikes in the price of essential goods such as food, energy and utilities as well as rising foreclosures and an overall deteriorating economy will likely intensify the need for aid to the most needy. The hope is that the combination of a lower requested $10 median tax increase with a years-long effort to educate and survey the community will finally result in a resounding “Yes” vote for at least partially repairing Champaign’s tattered, last-chance safety net for the most impoverished among us.