Rather than let state lawmakers quietly finish the spring session and begin their re-election campaigns, Gov. Jim Edgar plans to dump plans for a big tax increase into their laps.
Thursday, the Republican governor is expected to endorse a proposal that could raise state taxes by up to $2 billion while promising $1.5 billion in property-tax relief.
The idea is the product of a commission that Edgar formed a year ago to look into how the state pays for its public schools, for decades one of Illinois’ most vexing and divisive issues.
Edgar’s plan is an attempt to overcome the political equivalent of a midlife crisis. The Republican chief executive, almost halfway through his second term, wants to leave his mark on Illinois.
He has decided to do it by propping up the state’s dwindling share of financing public schools by shifting more of the burden to state taxes and reducing the share that comes from local property taxes.
The current system has created wide disparities in what local school districts spend to educate their pupils. Districts in wealthy areas can lavish more than $14,500 a year per student on programs and teachers, while districts in poorer areas spend less than $3,000 per pupil.
Edgar’s plan may seem noble, but that is not how it is being received by his fellow Republicans who control the General Assembly. They have agreed on a don’t-rock-the-boat agenda for the spring session designed to let them get out of town and focus on running for re-election and retaining GOP control of the state House and Senate.
By proposing a huge tax increase, even one offset by the promise of lower property taxes, Republican lawmakers fear that Democrats could bash them all the way to Nov. 5.
For years, anyone who has proposed shifting the school-funding burden to the state by forcing local governments to lower their property taxes has been dogged by questions about how this would be accomplished and public skepticism that, in the end, taxpayers would not come out close to even.
The latest politician to fall victim to this was Democrat Dawn Clark Netsch. Edgar beat her up during the 1994 governor’s race over her plan to do essentially what he is proposing now.
Sources familiar with the plan said Wednesday that Edgar will push for an amendment to the Illinois Constitution requiring the state to provide half the cost for guaranteeing a basic funding level of about $4,200 for each grade and high school student statewide.
At the same time, the proposed amendment would require a substantial reduction, estimated at $1.5 billion, in property taxes that homeowners and businesses pay for schools.
To do this, the state would have to raise about $2 billion by increasing general state taxes, such as the income tax.
The proposal is expected to win approval Thursday from Edgar’s school funding task force.
Edgar warned legislators in his State of the State speech two months ago that they should be prepared to deal with his plan.
“We rely too heavily on property taxes to fund education in Illinois. It is time to squarely address these issues. And I am optimistic you and I can do so during this legislative session,” Edgar told lawmakers.
Although reform of school funding has long been talked about in the Capitol, the issue encompasses virtually every political pitfall in legislative politics, from debates over tax policy to more parochial fights between Chicago, the suburbs and Downstate over who gets the money.
Those battles have become more intense as the share of state dollars to public schools has dwindled. The state now pays about 32 percent of the bill, compared with nearly 59 percent from local property taxes. Federal funding makes up the remaining 9 percent.
To amend the state constitution, the legislature would have to approve the plan by early May and submit it to voters for ratification in the Nov. 5 general election.
Edgar could wait until after the election to push his plan. But then the next chance to bring the idea before voters would be in the fall of 1998, when Edgar may be seeking another term.
By proposing a somewhat generically worded constitutional amendment, Edgar is hoping to provide tax-reluctant legislators some political cover by letting them say voters should decide how schools are funded.
But Edgar’s plan raises many concerns for Republicans, especially those in the House, where the GOP’s 2-year-old 64-54 majority is viewed as more tenuous given the political skills and fundraising ability of House Democratic leader Michael Madigan of Chicago.
Although suburban homeowners might enjoy some property-tax relief, albeit at the expense of higher state taxes, some Downstate residents could end up paying more local and state taxes for schools under the plan.
Further, state Rep. Al Salvi’s stunning victory in Tuesday’s Republican U.S. Senate primary also gives GOP legislators some pause. In the final weekend of the campaign, Salvi (R-Wauconda) accused his opponent, Lt. Gov. Bob Kustra, and Edgar of delaying the task force’s plan until after the election because it called for a big state tax hike.
Now, only 48 hours after Republican voters endorsed the zealously anti-tax Salvi over the moderate Kustra, Edgar’s support of the school funding plan is viewed by some as all but validating Salvi’s tax-hike concerns.
Democrats seized on the timing of Edgar’s announcement so quickly after Salvi’s victory, with Rep. Kurt Granberg (D-Carlyle) saying it is an example of why “people are so cynical about government.”
The proposed state constitutional amendment would not specifically say how lawmakers should come up with the additional school funding, potentially opening the door for a legal challenge and a court-imposed method of school funding.
To come up with the $2 billion viewed as needed to fund the plan and make up for lost property taxes, the task force is recommending the state use an income-tax increase, expanding the sales-tax base, inflationary growth in state revenues, unspecified cuts in government services, or a combination of those items.
To generate $2 billion from income taxes alone, the state’s 3 percent income-tax rate would have to go to 4 percent, while the corporate rate would go from 4.8 percent to 6.4 percent.
Edgar long has supported a true dollar-for-dollar shift from local property taxes to state income taxes as a means for financing schools. But he has said voters probably would suspect that they would pay more, and that apparently would happen under his proposal.
