TCR spoke to fiscal, education and policy experts to understand options that go from creating new revenue sources from scratch to reforming existing ones
Property taxes are a recurring topic in discussions at Chicago City Hall and Chicago Public Schools during this budget season. Will Mayor Brandon Johnson increase property taxes in the next fiscal year? Could Chicago schools lessen the burden of homeowners by relying less on property taxes and more on state revenue sources?
State-level initiatives to decrease the steadily growing property taxes in Illinois involve bills that seek to provide some relief and encourage a more in-depth analysis of the issue, as well as conversations with Chicago, its largest city, about ways to find alternative funding for public schools.
For the fourth piece in a series of stories about the future of property taxes in Cook County, TCR spoke to fiscal, education and policy experts to understand options that go beyond concrete bills or lobbying activities. They involve creating new revenue sources from scratch, reforming existing ones and resorting to innovative ideas. And they come from experts, advocates and community members.
Data shared by CPS Chief Budget Officer Michael Sitkowski with the Chicago Board of Education on July 24 show that 77 percent of the conversations held during the five feedback sessions on school funding last month stated the specific need for more revenue for schools.
Ideas included additional state revenue, community resources such as local businesses, non-profits, and neighborhood groups, regaining funds diverted to City TIFs, and focusing on equitable revenue sources like a progressive income tax.
Progressive revenue
In progressive income taxes, the tax rate increases according to an individual’s income.
Rep. Aaron “Jitu” Brown for the Chicago School Board said during a board meeting on Aug. 13 that legislators in Springfield seem more open to the idea, but that “it’s not part of the solution yet.”
Chicago Board of Education member Rep. Debbie Pope expressed a similar concern. “I hate to see our reliance on property tax,” Pope told TCR in an interview. “I’d like to see more tax on wealthy people instead of a flat income tax. I’d like to see a graduated, progressive income tax in Illinois.”
During another board meeting, on July 24, the Chicago Teachers Union and community members had defended a progressive income tax in Illinois.
“No cuts; tax the rich,” said CTU Vice President Jackson Potter during public participation, adding that billionaires should pay their fair share so Chicago doesn’t need to raise property taxes or cut school funding.
New revenue streams
Another option to lessen the burden carried by homeowners is to create new revenue sources in Illinois.
One idea being discussed by experts is the creation of a sales tax, currently limited to goods, that would be extended to include services. The move could bring up to $2 billion in additional revenue annually, according to a report released by the Center for Tax and Budget Accountability, or CTBA, last March.
“The state can use these incremental revenues to address today’s most pressing fiscal challenges, including education, transit, and unfunded pension liabilities,” the report says.
CTBA executive director Ralph Martire told TCR that it is impossible to phase out school funding from property taxes in Illinois, but that broadening the state’s sales tax base to include services could help.
According to Martire, who helped introduce the Evidence-Based Funding formula for schools and was present at a public learning session about education funding at CPS, including services on the sales tax base would mean more state revenue being destined for public schools and decrease Illinois’ reliance on property taxes.
He said that including services on the sales tax base would also make tax collection more equitable and fair, as it would help capture the spending of high-income consumers more accurately.
State Rep. Pope told TCR she would be open to the idea. “Maybe we need a sales tax on services, not just on goods,” she said. “Because services are much more consumed by the middle class and upper middle class.”
Outside the box
In the past two months, TCR has also heard from advocates and community members who shared innovative ideas.
Property tax advocate Anthony Travis, also known as the “Tax Doctor,” shared two drafts of bills he hopes to introduce once he finds legislative support. One draft proposes consolidating school districts as a way to save money and help schools rely less on property taxes. The other proposes a study to analyze the feasibility of phasing out schools from property taxes.
During the five feedback sessions on school funding last month, 37 percent of participants stated the need for creative new sources of revenue for schools, which included advertising revenue, digital ad taxes, proceeds from local festivals and other events and the sale of energy generated through CPS’ green energy projects, according to a presentation by CPS Chief Budget Officer Michael Sitkowski with the Chicago Board of Education on July 24.
Other ideas among community members include resorting to the Illinois lottery and casinos to find more money to fund public schools.
“The state has to pay its fair share,” CTU president Stacy Davis Gates said last week during the meeting in which the Chicago School Board approved the CPS budget for fiscal year 2026. She said CPS’s “structural debt” is attributable to a lack of state funding and to “our system believing that everyone else is responsible.”