OTHER IMPACTS OF THE DISPARITIES

policy.

Fiscal disparities in metropolitan areas have many consequences for public These have generally been well acknowledged and documented in the literature on metropolitan government. Many of them, too, have been mentioned at other points in this report. Rather than run the risk of redundancy, this section will not attempt to repeat these impacts, but rather it will dwell on those impacts which are generally less well acknowledged, but whose existence and seriousness was pointed up by the data gathered for this particular report. These include a fuller discussion of the particular disparities associated with the core city of Chicago, the relationship between the age of the community and fiscal disparities, and the relationship between a community's tax base and its spending patterns.

Chicago's s Disparities

Chicago's peculiar economic and sociological disparities have already been noted. Part II, Chapter 3, for example, commented on the disparity between the very high expenditure per capita for municipal services in Chicago as contrasted with the very low expenditures per student for educational purposes. It also noted that Chicago's tax base, contrary to many popular conceptions, is not wealthier than that of its suburban neighbors, that the taxable wealth provided by its great industrial and commercial centers is more than offset by its unusually large percentage of families with incomes near or below the poverty level of $3,000 per year. Part II, Chapter 4, then noted the vast sociological disparities in Chicago and the unfortunate but accurate correlation between the racial composition of a neighborhood and its comparative level of affluence. Finally, it documented, with its charts, what is probably the most disturbing fact of all, and the most glaring disparity between Chicago and its suburban neighbors, namely the fact that Chicago has a disappearing middle class while the middle class forms the backbone of suburban citizenship.

This flight of Chicago's middle class partly explains Chicago's poor record of expenditure per pupil enrolled in its public schools. A second cause is Chicago's large Roman Catholic population and its massive Catholic school system. As the suburban data show, it is the upper and middle classes that demand good school systems, but Chicago's schools are stricken with an affluent class that can afford private schools and with a middle class that is largely either fleeing the city or focusing their concern on the parochial school system. Together, all of these groups are little concerned about the level of the city's educational services, but very concerned with the city's level of municipal services. Thus is derived Chicago's peculiar level of resource allocation between the municipal and educational services.

Even if consumer demands for public services should shift in Chicago, and Chicago's large impoverished population should demand higher levels of spending for educational purposes, it is doubtful that the city could do much to change its present resource allocation formula. In the first place, with its property tax base per capita declining and with the daytime commuters' continuing need for services compelling a high floor below which per capita spending for municipal services may not go, it is doubtful that Chicago can raise, from its own tax base, large amounts of additional revenues for educational purposes. To be sure, it could make a greater tax effort than it previously did: among the communities studied, Chicago's tax rate levy for educational purposes was the lowest. It is quite apparent, however, that Chicago needs outside assistance if it is to revitalize its educational program.

Not only do Chicago's daytime commuters need intense levels of municipal services, so also does Chicago's large and rapidly growing underprivileged population. Chicago has in fact already begun to serve as a large collection and training center for the area's educationally and economically deprived citizens. Unfortunately, however, its success in acculturating and returning these people to middle class society will

depend in part upon the ability of these people to move into the middle class neighborhoods to which they aspire. For many of Chicago's residents, however, such mobility is not now available. The statistics cited earlier document the fact that housing for the nonwhite is at a severe premium in the suburbs. Furthermore, those nonwhites who do live in the suburbs tend, for the most part, to live in nonwhite clusters, rather than scattered through the white communities. Unfortunately, the progress currently being made toward open occupancy in the SMSA has been slow.

At any rate, the effectiveness with which Chicago performs this human development role will depend upon the degree to which middle class aspirations are realistic for members of minority groups and the extent to which the city receives outside financial assistance for the particular service burdens imposed upon it by the nature of this special function.

Community Age and Fiscal Disparity

From the standpoint of age, there are two different categories of communities that were included within the scope of this study: those that were primarily developed before World War II and those that have undergone their greatest surge of development since that date. Those communities which were developed prior to the second World War now find themselves falling a victim of age. With age has come such trends as declining per capita property tax valuations, a decline in the socioeconomic level of the community's residents, in-migration of nonwhite minority groups, and the emergence of a need for such specialized urban services as urban renewal, remedial education programs, and poverty war programming.

Trends of this kind have long been associated with the core city in metropolitan areas, and this is certainly the case in the Chicago SMSA. However, the same trends are equally apparent in many of the older suburban communities built prior to World War II. Specifically, these trends are already apparent in the cities of Evanston, Oak Park, Maywood, and Summit, all of which are suburbs located on or near Chicago's city limits. In other words, the problems traditionally associated with the core city are in fact spreading outward and, in the Chicago SMSA, are already beginning to engulf the older cities lying on Chicago's borders. To a lesser extent, many of these same trends are found in the older communities, such as Aurora and Woodstock, which are now part of the metropolitan area but which are not close to Chicago itself.

Each of the four aging communities near Chicago's borders is a unique case, and as a result its response to the aging process has been somewhat different. In Evanston's case, for example, the community has fallen from its former status as a high income suburb to its present status as a middle income community. Because of its rising pattern of service demands and the falling valuation of its aging property, however, the city has been confronting financial problems of increasing severity. Offsetting these problems has been the city's relative success in bringing property formerly classified as tax-exempt back on the tax rolls. Thus, although the socioeconomic level of its residents has fallen, Evanston has been able to slow down the worst impacts of aging and maintain a viable, progressive governmental system.

Oak Park's situation is roughly comparable to that of Evanston. Oak Park, too, has slipped from the status of an upper income community to that of a middle income community. With its inherent level of affluence, however, Oak Park has also been able to retard the worst consequences of the aging process by undertaking selective urban redevelopment programs, most notably the replacement of old single family homes with new multiple dwelling units that are attractive to young Chicago commuters. Thus, although like Evanston the city is now in a financial bind, it also has been able to maintain its fiscal soundness up to this point.

Summit, too, has been able to maintain its fiscal soundness, but this is because it, unlike Evanston and Oak Park, has failed to respond to the changing pattern of service demands made upon it. Thus, its residential and commercial neighborhoods are deteriorating rapidly, the socioeconomic level of its residents is falling, and the per capita level of its assessed valuation is also declining. Because it is an industrial enclave, however, Summit does, if it chooses to do so, have the capacity to respond to the challenges now confronting it.

The case of Maywood is entirely different. Maywood was once a middle income community, but its housing stock has aged, its streets have become cluttered with traffic, it has felt the in-migration of nonwhites, and it has gradually fallen from a status of a middle income to a low income bedroom community. As its housing stock ages, furthermore, its property tax per capita valuation has also declined, with the consequence that the community finds itself increasingly hardpressed to supply the services it has traditionally provided its residents. Furthermore, it is also confronted with the need to respond positively with new kinds of service programs. In an effort to rebuild its tax base, the community has undertaken urban renewal programs to clear some of its land, hoping to attract industrial or commercial development. However, these efforts have not succeeded and the land clearance programs have simply resulted in a further decline of the community's assessed valuations. Thus, Maywood appears to be confronted with a dilemma: it lacks the property tax base to undertake a level of services demanded by its changing socioeconomic structure and by the aging stock of community buildings, but it also finds that attempts to rebuild the community with new industrial or commercial properties has not been successful. Thus it is facing the prospect of a chronic deterioration, not only of its tax base, but of its ability to supply the services needed by its residents.

Obviously, these communities stand in stark contrast to the newer, more affluent neighbors. They also serve as an omen of things to come, for there is no reason to suspect that the outward movement of core city problems will stop with the first or second ring of suburbs; in fact, there is every reason to believe that their movement may be accelerated in many of the newer, bedroom communities which lack a diversified tax base and in which the housing stock promises to age quickly.

Thus, age becomes a factor of major significance in differentiating between the financial condition of various communities. It also becomes a major causal factor for fiscal disparities within metropolitan areas. Further, the different patterns of success in coping with age, exemplified by communities such as Oak Park and Maywood, also point to the need for better balanced tax bases in the development of suburban communities.

Governmental Spending Patterns

There are disparities in the amounts different communities spend for such basically essential services as police protection, streets, utilities, and other public works programs, but there are even greater disparities in the percentage of their budget allocated to such "non-basic" expenditure items as libraries, recreational programs, and similar amenities of the "good life." Interestingly enough, however, the percentage of a community's budget allocated to such amenities is not determined by the comparative wealth of the community's tax base, but rather it is a product of either of two factors: (1) the age of the community, or (2) the socioeconomic level of the community's residents. Thus, for example, the older communities, such as Aurora, Evanston, Oak Park, Summit, and Woodstock devote a relatively high percentage of their municipal budget to such functions. Similarly, such upper income and middle income, white collar, bedroom suburbs as Flossmoor, Oak Brook, and Park Forest devote a similarly large percentage of their income to such factors. (Interestingly, the most affluent suburb, Winnetka, does not devote a large percentage of its income to such non-essentials, but this might be partly explained by the fact that Winnetka is located on the shore of Lake Michigan and is able to provide excellent swimming and other recreational facilities to its residents

at a relatively modest cost. If this is true, it would then mean that geographic location is another factor of consequence in determining the comparative disparities between communities within a metropolitan area.)

so.

Presumably, such suburbs as Franklin Park, Summit, Niles, and Hillside, with their wealthy tax bases, could provide such nonessential services if they chose to do The fact that they have chosen not to do so, however, is apparently indicative of a conscious choice on the part of their residents, largely middle or lower income blue collar workers. Such choices legitimately belong to residents in any metropolitan area, but it raises problems for those who would seek to alleviate disparities. Should the provision of such amenities as library facilities and swimming pools, desirable as they are frequently deemed, be considered a part of the "essential package of municipal services" to be taken into account when determining a given community's need for supplemental financial assistance from outside sources?

PROJECTIONS AND RECOMMENDATIONS

As demonstrated in Part III, the existing disparities in fiscal resources among units of government in the metropolitan area are severe. They generate major differences in the quantity and quality of public services which different governmental jurisdictions can provide with the same level of tax effort, or enable other communities to acquire considerably more public services than their neighbors by approximately equal tax effort.

It is also significant that, as pointed out in Part II, the sociological disparities between neighborhoods within the City of Chicago is much greater than are similar disparities between suburbs outside the central city. In fact, if the suburbs were subjected to the same disparities existing in the core city, it is entirely probable that the present system of government would break down completely. That the present government survives amidst these disparities in the City of Chicago at all can be attributed solely to the high degree of diversification within the central city, a diversification of industrial and commercial property so great that the central city has to import thousands of workers daily to fill the jobs in its stores, factories, and office buildings.

However, the suburbs do not have this kind of diversification in their tax base, and so the question remains: "What of the future?" The purpose of the following paragraphs is to answer that question and to suggest guidelines which, if followed in the formulation of future public policy for metropolitan areas, might help create better socioeconomic and fiscal balance in metropolitan areas and thus retain the viability of the nation's basic local governing system.

PROJECTIONS

The General Conclusion

A look at current trends in the State of Illinois and the Chicago Standard Metropolitan Statistical Area can lead to only one conclusion: the disparities now apparent among governments in the Chicago SMSA are becoming worse and can only be expected to continue getting worse given the continuance of existing public policies relating to metropolitan growth, development, and government.

This conclusion is based upon: (1) statistics on existing financial trends, (2) the absence of any trend towards balanced tax bases in suburban governments, (3) the predictions of the Northeast Illinois Planning Commission about the future of the Chicago SMSA, (4) the impact of age upon community well-being in the suburbs, and (5)

present, observable trends in Illinois state law. Each of these will be discussed further.

The Underlying Rationale

Statistical trends.--Many statistics can be cited in support of this argument, but there are few that refute it. Only the more significant of these statistics will be repeated here.

Perhaps most disturbing are the trends in the assessed valuation per capita of the various communities studied in the Chicago SMSA. Many communities in recent years have experienced an increase in their assessed valuation per capita, thus providing improvements in local budget flexibility, but, ominously enough, too many communities have suffered just the opposite experience. Of the 18 communities studied, the following experienced increases in their assessed valuation per capita during the early years of the 1960's: Evanston, Flossmoor, Fox Lake, Franklin Park, Hillside, Hoffman Estates, Park Ridge, Robbins, and Winnetka. Suffering a decline during the same period in their assessed valuations per capita were the following: Chicago, Maywood, Niles, Oak Park, Park Forest, Summit, and Woodstock. The per capita assessed valuation in Aurora remained virtually constant during the period.

A significant fact in this listing is this: Those communities experiencing an increase in their tax bases, with but three exceptions, are those that are now providing their existing levels of municipal services without placing a great deal of strain on local taxpayers. Those whose assessed valuations per capita are falling, however, are, with one exception, the same communities that now find themselves hard pressed to provide their existing levels of municipal and educational services. The single exception among those communities whose tax base per capita is falling is the city of Niles where assessed valuations are hurt by the gradual decline of the suburb's traditional commercial strip development along its main streets and highways. In Niles, however, this decline is offset to a considerable degree by the rapidly increasing sales tax receipts provided by the suburb's major shopping centers.

There are three exceptions among those communities whose assessed valuation is rising: Evanston, Hoffman Estates, and Robbins. There is at least a partial explanation for Evanston: the community in recent years has had considerable success in adding to its property tax roles parcels that were previously listed as tax exempt because of their affiliation with Northwestern University or other charitable, religious, or educational institutions. These increments to the tax base have tended to offset the decline in value of other property within the suburb. The increases in the tax bases of Hoffman Estates and Robbins can only be viewed as a healthy exception to an otherwise disturbing pattern of change.

Thus, the strained fiscal condition of many of the SMSA's presently hard pressed communities, including the core city of Chicago, is threatened to become progressively worse in the years immediately ahead, thereby further aggravating the governmental problems stemming from the existence of fiscal disparities.

There is a second element of concern in the statistics. With the exception only of Evanston, an exception which is at least partially explainable, all of the older communities included within the scope of this study have found themselves beset in recent years with a declining property tax base when measured in per capita terms. This includes Chicago, Maywood, Oak Park, Summit, and Woodstock. The remaining older balanced community, Aurora, has also failed to register an increase in the per capita wealth of its tax base. The fact that this same experience is being shared by virtually all of the older communities included within the study seems to indicate that other suburban communities, as they grow older, can expect to experience deterioration in the wealth of their tax base. The deterioration in the communities just mentioned is offset, at least in part, by the comparative balance in their tax bases, but such will not