And so, after months of sob stories and platitudes, of blue-ribbon studies and gold-plated declarations, the question of education funding reform comes down to this:
Will the Illinois General Assembly raise taxes on the state’s wealthiest citizens in order to improve conditions for kids in its poorest school districts?
That, dear reader, is the crux of the matter. Forget all the palaver about local control, teacher tenure and who is or isn’t qualified to be a school nurse. And ignore, if you can, such Springfield sideshows as the impeachment of Judge What’s-His-Name and the outlawing of drive-through mastectomies. (He won’t be, and it’s a non-problem.)
What we have now, at long last, is a specific school funding proposal that identifies who gets and who pays. It was worked up by Gov. Jim Edgar and a group of eight delegated lawmakers. But the legislative leaders haven’t signed on, and they probably won’t until sufficient numbers of plain folks make their preferences known.
If this proposal flies–and it’s a huge “if”–the winners will be: 1) the aforementioned 400,000 kids in property-poor school districts; 2)the majority of middle-class homeowners throughout the state; and, most of all, 3) the farmers. The tractor-and-overalls set makes out like bandits.
The losers would be the 300,000 or so Illinoisans with incomes in excess of $100,000. High-income renters would be hit hardest of all, unless changes are made to give them the equivalent of a property tax break.
But “loser” is, perhaps, too loaded a word. One can argue that paying higher taxes to raise the quality of education in poor school districts is a solid long-term investment for the well-to-do. It depends on how narrowly they define their self-interest.
But back to the nuts and bolts.
According to the plan surfaced late last week by the governor and legislative negotiators, the state income tax on individuals would be raised to 3.75 percent from the current 3 percent. The corporate income tax would remain at 4.8 percent.
(Since their income taxes would not be raised nor their property taxes lowered, big business presumably should be neutral toward all this. But they won’t be, because a lot of companies–especially in heavily-assessed Cook County–pay excessive property taxes and had hoped to share in the relief.)
The additional $1.5 billion in income tax collections would be dispensed in the form of: 1) property tax relief and 2) increased state aid to school districts, mainly to property-poor school districts. Actually this plan needs another $340 million to do all that’s proposed– a gap that might be filled by raising taxes on riverboat gambling.
Property tax relief would go to all homeowners statewide in what amounts to a 30 percent reduction in school taxes for property owners who qualify for the state’s homestead exemption. (Virtually everybody who lives in their own house qualifies.) So if you’re now paying $1,000 a year to your grade school district and $1,000 to your high school district you’d save about $600. The state will then compensate your school district for the lost property taxes, and then some, depending on the size of your district’s tax effort, tax base and percentage of kids from impoverished families. When all is said and done, no district would lose money and the poorest would gain substantially.
In all, there would be $605 million in “new” money for schools. The biggest winners would be rural school districts, some of which are spending barely over $3,000 a year on each student. Farmers would do best, for besides new money for rural schools they’d get property tax relief on both their homes and farms. Winners, too, would be school districts in south and west Cook County that have lots of low-income kids but hardly any property tax base.
Chicago, with its strong property base, already is spending more per pupil than the $4,225 minimum, and would not benefit all that much, in relative terms, compared to poorer suburban and rural districts. City schools would get an extra $130 million, a small drop in the Board of Education’s $2.8 billion fiscal bucket.
This plan leans heaviest on the wealthy because somewhere between an annual income of $100,000 and $200,000 that .0075 income tax increase starts exceeding the plan’s tax relief on even the largest of homes. For the 25,000 or so Illinoisans with incomes over $500,000, the increase will be substantial.
This puts a lot of legislators, particularly those representing the wealthiest suburban districts, in a tough spot. Their schools won’t be getting much new aid, if any. Yet their wealthiest constituents, and their most generous political contributors, will be providing the bulk of the “new” money.
So is it a soak-the-rich plan?
The answer depends, again, on how our state’s wealthy regard their self-interest. If they pause to consider that Illinois is now a relatively low-tax state, and that spending more on schools may be cheaper in the long run than spending more on welfare and jails, than the well-to-do might accept this plan or something like it. If their attitude is “I’ve got mine, you go scratch,” they’ll fight this thing as only the wealthy can.
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Whatever the weeks ahead may bring, there is now a plan on the table for all to consider. Credit Gov. Edgar for pushing it this far. Now let’s see if the legislature sides with the wealthy or with the kids.