Did you hear the one about the candidate and the tax increase?
Of course not, because politicians, in Illinois at least, have found tax-hike talk to be anything but funny and everything but a winning strategy when running for office.
Which is one reason why the four Democrats battling for governor in the March 17 primary have said little in campaign commercials about overhauling the way Illinois finances its public schools, long the state’s biggest political headache.
The funding system has put the squeeze on less affluent school districts and caused local property tax bills to soar everywhere. Two decades ago, the state picked up nearly half the school funding tab, but over the years that level of support has dribbled to below one-third.
For years, experts have argued that the smartest and most comprehensive fix would require an increase in the 3 percent state income tax.
But such a notion is raw meat for tax-haters, who consider the phrase “income tax hike” to be blasphemy and place office-seekers who utter it not much above practitioners of animal sacrifice.
The quartet of gubernatorial candidates on the Democratic ballot–Jim Burns, Roland Burris, Glenn Poshard and John Schmidt–haven’t ignored funding reform. But, perhaps mindful of the minefield the question poses, they address it gingerly.
In campaign pronouncements as well as answers to a Tribune question, the four detail school funding plans that in varying degrees are built around caution, crossed fingers and cliches.
Poshard, the veteran southern Illinois congressman, comes closer than any of his rivals to endorsing the notion of an income tax hike for schools. But he also does semantic backflips to avoid actually saying the words.
“I supported, and still support, the plan that Gov. (Jim) Edgar introduced,” Poshard said in his response to the Tribune.
That plan, blocked last year in the Republican-controlled Senate, would have bumped up the income tax by 25 percent to provide $900 million in property tax relief and more than $600 million in extra funding to schools.
Such a scheme, Poshard said at a recent debate, would provide the “only systematic change that will, over the long haul, close the disparity in funding” between rich and poor districts.
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As a fallback, Edgar, a Republican who is retiring from office after this year, cobbled together a package of cigarette, gambling and telephone taxes that funneled $485 million to the state’s poorest school districts. It narrowly passed, though it did nothing to ease the heavy reliance on property taxes.
Poshard was less than enthusiastic about the compromise. “Sin taxes are not a reliable funding mechanism for financing education,” he said. “Unlike the state income tax, which has never failed to keep pace with inflation, we have seen that lotteries and sin taxes can rapidly and unexpectedly decline.”
Like Poshard, private citizen Schmidt supported Edgar’s tax swap plan. A year later candidate Schmidt says its goals could have been accomplished with “something less” than a 25 percent income tax boost.
Schmidt, a former top aide to Chicago Mayor Richard M. Daley, doesn’t reject the idea of an income tax hike. But he insists it would have to be revenue neutral, designed solely to reduce the reliance on property taxes to fund schools and not actually net more money for them.
“At this point I support a dollar-for-dollar swap that would shift the burden from property taxes to income taxes, but I’m not in favor of any further tax increases,” Schmidt said, adding that even that idea might be a tough sell. “Right now, property owners . . . are skeptical that if they agreed to an income tax increase, they would actually see a concurrent property tax decrease.”
If elected, Schmidt promised to back legislation mandating a 4.5 percent annual boost in state funding for schools, probably enough to outpace inflation. He said one potential source for that money could come from imposing a cap on spending growth in other areas of state government.
Burns, the former U.S. attorney, said he could see pluses and minuses in a tax swap plan. But, like Schmidt, Burns promised only to back one that was revenue neutral and not an “(income) tax increase masquerading as property tax relief.”
Both he and Burris contend funding reform can easily be accomplished by simply relying on revenue growth, even if the economy soured.
“My plan calls for dedicating 50 percent of state revenue growth for education,” Burns said. “This will result in an increase in the state share of funding by $1.1 billion (over four years) based on extremely conservative projections. If state revenue growth continues to be at historic averages or higher, we can dedicate even more to schools. All of this increases the state share of funding without raising any taxes.”
Burns also he would also seek to minimize administrative overhead by insisting that 90 percent of education funds be spent in the classroom, either directly for instruction or for school construction.
Burris, the former Illinois attorney general and comptroller, takes a have-your-cake-and-eat-it-too approach to school funding reform. He promised to boost state education spending by at least $1.2 billion over the next four years without any income tax increase, and while freezing the share of school money that comes from property taxes at current levels.
One key, Burris said, was simply to tap into the magic of revenue growth. “In the last 22 years, there’s only been one year where there hasn’t been revenue growth,” he said. “. . . We have been allocating (that money) to everywhere but education.”
Burris said boosting the income tax to help education was unnecessary, and aides have called it a politically unviable option that could never pass the legislature. On the other hand, Burris said “sin” tax hikes on gambling, liquor or cigarettes might be options down the road.
New money flowing into poorer districts should be used to reduce class size, buy computers and improve infrastructure, Burris said. His plan also includes money for more affluent districts.
“We’ll also need to give richer districts grants so the inflationary (property values) in their school districts won’t make property taxes go up,” he said.
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