NEW IPO Logo - by Charles Larry Home Search Browse About IPO Staff Links


The state of the State



Education and taxes: last year and this year




ii880306-1.jpg
By MICHAEL D. KLEMENS

A year ago Gov. James R. Thompson proposed a budget with a billion dollar tax hike that he later admitted was "a bit immodest.'' This year he proposed no tax increase, but said he would support a "modest" boost.

A year ago the state was spending more than it was taking in. This year Illinois is not.

A year ago the state had to borrow $100 million to get through February. This year Illinois repaid the money with interest.

A year ago most lawmakers were as far as they ever get from an election. This year 30 face primaries and 99 have opposition in the general election.

A year ago the Illinois State Chamber of Commerce opposed new taxes. This year the Illinois State Chamber of Commerce opposes new taxes.

A year ago the 1987 session of the 85th Illinois General Assembly was about taxes and education. This year the 1988 session will be about taxes and education.

Educators argue that the two are linked and that without new taxes schools cannot do their job. There are other linkages too — to issues like money for suburban schools and improvement of Chicago schools — that must be solved before a tax hike can be passed.

The public push began February 2 when Gov. Thompson addressed a joint session of the Illinois State Board of Education and State Board of Higher Education in Chicago. Educators knew Thompson would say that without a tax increase there could be no new money for elementary or secondary schools, community colleges or public universities. He did: "Sadly in FY89 we cannot count on any additional money for education than we have in this fiscal year. While you hope for more money and work for it, you must prepare your own budgets based on the amount you can count on."

The response was no surprise either. Richard D. Wagner, executive director of the higher education board, argued that when inflation was considered, no increase meant an actual decline of $161 million (12.1 percent) between fiscal year 1987 and fiscal year 1989. Wagner found proof of problems in state rankings for educational achievement that place Illinois 32nd in percentage of adults who have completed high school, 31st in percentage who have completed some college and 25th in percentage of adults who have completed at least four years of college. At the same time Illinois was 43rd in state tax burden. "Clearly, Illinois has the capacity to make a greater investment in education," Wagner claimed.

"Without a state tax increase for education, our elementary and high schools will face another year of cuts in state funding, their third in the last six years," said Ted Sanders, state superintendent of education. "Each time that happens, the quality of education in our schools and the quality of life in our state declines," Sanders charged.

Sanders and Wagner announced plans to mount a grass-roots campaign to promote a tax increase for schools. That work has already begun. In each of 21 regions in the state five-member committees have been named to coordinate the effort. Each includes a school superintendent and a representative of the Illinois Education Association, the Illinois Federation of Teachers, the Illinois Parent Teachers Association and the Illinois State School Boards Association. The committee will go into every school district in the region to groups


March 1988 | Illinois Issues | 6


like PTAs and chambers of commerce to try to find grass-roots support for a tax increase.

Also being sought is support from the business community. Educators expect to put together a group of prominent businesmen, chief executive officer types, willing to cite the need for better education and to support a tax increase. Opposition is expected, and the group recognizes that a push from Springfield will not succeed. The effort represents a unique fusion of higher education with elementary and secondary. Supporters hope that will bring lawmakers who are partial to one cause or the other on board for both. The scenario calls for building quiet support before the primary election, being careful not to place lawmakers in a position where they would say no. After March 15 it will be easier to identify lawmakers who could support the needed tax hike.



. . .then there is the
problem of convincing the
business community, which
adamantly opposed tax
increases a year ago


There are hurdles. The toughest may be the need to do something about the Chicago public schools. Unless lawmakers can be convinced that improvements are in place it will be difficult to sell them on boosting taxes for education.

Another hurdle involves bringing suburban lawmakers on board. Their constituents pay healthy income taxes, and their schools already get little state money through the general state aid formula. Sen. Jack Schaffer (R-32, Cary) says some districts in his area have sold voters on property tax referenda by convincing them that local schools get more money for fewer taxpayer dollars with the property tax. It will be difficult to convince those school officials to campaign for higher income taxes.

And then there is the problem of convincing the business community, which adamantly opposed tax increases a year ago. The businessmen they must convince are worried about public schools, a fact illustrated in a questionnaire sent out by the Illinois Manufacturers' Association and answered by 360 of its members. The survey asked: "How do you rate the general level of high school graduates applying for jobs with your company?" Choices were superior, average or poorly educated. No firm rated the graduates it saw superior. Fifty-four percent rated them as having average skill, and the remainder found them poorly educated. Businesses from Chicago rated students the worst; those from downstate gave the graduates the highest marks; and suburban businesses fell in the middle. The companies reported on the survey that they were having the hardest time hiring graduates with skilled trades and the easiest finding office workers.

The firms do not see more money as the solution to the problem. They ranked that last among nine solutions to the problem. The top rated solution was establishment of mandatory standards. That was followed by modifying tenure to weed out inept teachers and then reduction of school bureaucracy.

Despite the concern with the quality of schools, some manufacturers' association officials think their members are not absolute in opposition to a tax hike for schools. William E. Dart, the association's vice president for government affairs, suggests that people in general are beginning to feel guilty about the lack of follow-through on the 1985 education reform package. His members are most worried about improving the manufacturing climate, a task that could be accomplished through repeal of the tax on energy used in manufacturing and revisions to the workers' compensation and scaffold acts to reduce costs, Dart says.

A more absolute "no" is likely to be heard from the state's other large business group, the Illinois State Chamber of Commerce. "Instead of considering a general tax increase, the General Assembly ought to look into options for real reform — which means providing a better product — especially in Chicago," Chamber President Lester W. Brann Jr. charges.

Brann says his members are interested in education, but they feel that the state must establish spending priorities. If education is a higher priority, money could be taken from somewhere else in the state budget. "Until we start establishing some spending priorities, it's too early to talk about tax increases," he argues.

The final bear that tax hike proponents must wrestle is the question of how much money is available. A year ago $431 million in "natural revenue growth" translated to $115 million in reduced spending. This year the year end balance will not have to be built up, nor does $100 million in short-term borrowing have to be repaid. And Illinois revenues will exceed spending in fiscal year 1988.

There are still unpaid bills. Edward T. Duffy, director of the Department of Public Aid, says he will process the last Medicaid voucher in mid-April, for payment in May. Then he will be out of spending authority for this year. When fiscal 1988 ends on June 30 doctors, hospitals and nursing homes will be waiting 72 days for payments, and Illinois will be paying them interest. Duffy says it will take $279 million in additional appropriations just to keep the situation from getting worse in the year that begins July 1. To reduce the payment delay to 60 days and avoid interest penalties will take a total of $345 million, Duffy says.

And there is more. The administration estimates that on July 1 taxpayers will be owed $100 million in income tax refunds and another $25 million in payments to those on low incomes for pharmaceuticals through the circuit breaker program.

Total the bills, and a substantial portion of the "natural" revenue growth is gone. If all that sounds familiar, it should. It was the stuff of debate a year ago. But this year things will be different, say those who will argue the case.

A year ago by the time it became apparent education would see no new money, it was too late for local districts to lay off teachers, to slash budgets, says Robert Leininger, chief of staff to Ted Sanders. This year, he says, "There's going to be a lot of blood to show."

A year ago the problem was viewed as one in Springfield. This year local school boards will be confronting the crisis. "Every night, from now to June, school boards will be meeting to take the official action [to cut budgets]," Leininger says.

A year ago education interests fell short in an eleventh hour attempt to salvage a tax hike. This year they are starting early. □


March 1988 | Illinois Issues | 7



|Home| |Search| |Back to Periodicals Available| |Table of Contents| |Back to Illinois Issues 1988|
Illinois Periodicals Online (IPO) is a digital imaging project at the Northern Illinois University Libraries funded by the Illinois State Library