YOUR TURN

The debate over the best way to finance elementary and secondary education in Illinois covers the same ground over and over again.

Property taxes are regularly acknowledged to be an out-of-date, inequitable and unpopular way to fund schools. The proposed "solution" — more reliance on state government with its income and sales tax revenue — is trotted out time and again.

Yet there is growing recognition that this solution is not a good one. For one thing, increased dependence on state resources has injected uncertainties into school district budgeting. Each year the General Assembly approves the state aid appropriation well after personnel decisions for the next school year must be made. At the same time, lawmakers continue to burden school officials with costly and time-consuming mandates that must be funded through property taxes.

It's time for a new approach. As the Republican Congress considers moving money and power out of Washington and back to the states, so the Illinois General Assembly should consider giving local governments more of the tools necessary to deal with some of the state's pressing problems, including the quality of our local schools.

Efforts to relieve the regulatory requirements imposed on schools is a welcome change, but Illinois' school leaders need more autonomy and more control over their own local resources.

State Sen. Harry "Babe" Woodyard's proposal to authorize local school districts to impose a local income tax is exactly the right idea to get decisions about elementary and secondary education out of Springfield and back to the elected school boards (sorry Chicago) in our communities. Woodyard is a Chrisman Republican.

Local boards can and will do a better job of finding the right combination of taxes and services for individual communities. And they'll accomplish that with more accountability than could be achieved under a statewide, one-size-fits-all approach to education. Many states have already given other units of local government authority to impose income and/or sales taxes at the local level. Iowa, Ohio and Pennsylvania have authorized the local income tax specifically for school districts and many local districts in these states have made use of the option.

But many people are reluctant to take this step in Illinois without better information about what the tax would mean for their school district. In order to understand what a local income tax would actually look like, it's necessary to frame a question: How much would the local income tax rate need to be in order to replace one-half of the current school property tax?

The answer to this question for eight Illinois school districts is presented below.

School District and Number	Local Income Tax Rate Needed
Chicago 299	2.3%
Elmhurst 205	2.0
Cahokia 187	1.9
Carlinville 1	1.7
Brown County 1	1.3
Peoria 150	1.2
Knoxville 202	1.1
Decatur 61	0.6

It should be emphasized that these rates are estimates based on Illinois Department of Revenue and local school district information.

I examined 24 of the state's 900-plus school districts and found that in 20 districts the property tax rate reduction would exceed the rate of local income tax needed to replace the lost property tax revenue.

Of course the reasonableness of these tax rates is a matter of political judgment. In fact, some districts might want to increase the total revenues coming into their districts without reducing the property tax and could offer the voters such a proposal. Other districts might want to opt for some combination of property tax reduction and income tax increase. Still others may not want to avail themselves of the local income tax option at all.

But it is my contention that the local income tax would represent a very desirable change for most school boards and would likely be adopted by a local referendum vote, as required under the Woodyard proposal.

David Olson is an associate professor of accountancy at the University of Illinois at Springfield. He was a member of the Jacksonville School Board from 1983 to 1991.

42 ¦ April 1996 Illinois Issues