A TALE OF TWO SCHOOLS

In one suburban district, it is the best of times;
in another, the worst of times.
Welcome to the fight over school funding

by Dave McKinney

Recent budget cuts at Bloom High School in Chicago Heights eliminated advanced French, graphic arts, accounting and most other elective courses. After-school sports, like swimming, also were among the $4 million in programs pared by the south suburban school district. With Bloom's indoor pool now drained, cash once spent on chlorine pays the salary of a teacher.

Fifty miles away, along the affluent North Shore, exists a far different learning environment. Students at Evanston Township High School enroll in specialized classes in Latin or Japanese, banking and finance, acting and 20th-century Russia. When school ends, students can tape news broadcasts from the school's television station, or jump in the swimming pool to play water polo.

"Not that my kids can't go to the U. of I. They can," explains Bloom Principal Lynda Byrd, whose district last November rejected a tax-increase request for the sixth straight time. "But I can't offer them all of the experiences other kids are exposed to. That's the painful part."

The contrast between these two pockets of suburbia, one wealthy, one struggling, illustrates what is wrong with Illinois' $13 billion system for funding schools, and why both political parties list school funding reform as the General Assembly's No. 1 priority this spring.

The basic problem is this: School funding is heavily skewed toward an overreliance on property taxes; as a result, educational opportunity for Illinois schoolchildren is largely a function of where they live.

Simply put, property wealth isn't spread evenly throughout Illinois. A school district in prosperous Lake County north of Chicago can spend more than $15,000 per pupil. But in rural Clinton County, near Collinsville, another district struggles to spend $3,000 per child. That kind of financial disparity means one school may be blessed with the latest computer equipment, while another is still stuck with outdated computers running obsolete software.

This gap between rich and poor results from two basic factors. The first is the way the school aid formula works; it fails to give poor school districts a meaningful lift — even though the funding equation is supposed to be structured in their favor. The second involves the level of state funding, which has failed to keep pace with rising educational costs. As a consequence, the state's share of total education expenditures has fallen from nearly half 20 years ago to barely a third today. That has left schools with little choice but to meet rising costs by turning to property taxpayers — like those in Chicago Heights who have six times rejected tax increases that would support advanced French and the swim team.

"I think everybody should accept the fact that if you have one school district that [spends] less than $3,000 per student and you have others with more than $15,000, chances are you aren't going to have equal educational opportunities between those schools," Gov. Jim Edgar says.

But striking a middle ground between Illinois' richest and poorest school districts has been a decades-old dilemma, pitting one region of the state against another. This spring's debate promises more of the same. Downstate lawmakers want to preserve the current state-aid formula at all costs because it gives poor districts the greater share of state revenues. But suburbanites representing wealthy regions want a way to free up more state money for their schools, which typically get very little back from Springfield. Suburban lawmakers also are gearing up for a fight to make sure they don't wind up the net losers in an exchange of higher statewide taxes for lower property taxes.

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The state's share of total education spending has steadily eroded since 1976, when 48 percent of a school district's budget came from Springfield, to about 32 percent now. According to the latest numbers from the U.S. Department of Education, only two other states in the country — New Hampshire and South Dakota — pay a smaller proportion of the bill for educating their schoolchildren.

As the state's percentage of the bill for education declined over the past two decades, property taxpayers in Illinois have had to pay more and more. School districts now get 59 percent of their revenues from property taxes, up from 45 percent in 1976.

The trend toward lower state support and heavier reliance on property taxes particularly in those districts with little to no tax base has left many schools throughout the state barely functioning, says Wayne Sampson, executive director of the Illinois Association of School Boards.

"In every region, appalling conditions exist. In Ina, in southern Illinois, a 75-year-old elementary school building is so overcrowded, its classes are being held in closets. In West Pike, in west central Illinois, the library facilities are so inadequate that students are encouraged to do their research at the nearest public 'library in Hannibal, Mo. In the Ashland school district, not far from Springfield, students prepare for the 21st century by using computers so ancient that they can't run Windows programs. ... And the list goes on and on," Sampson says.

In the early weeks of the new General Assembly, Edgar, Philip, Democratic House Speaker Michael J. Madigan, and key interest groups have begun staking out their positions on school funding.

For Edgar, the basic principles remain the same as last year, when he embraced the findings of a task force headed by former University of Illinois President Stanley Ikenberry.

"The two ingredients that have to be in any meaningful reform are shifting away from the property tax and, secondly, dealing with equity," says Edgar, who considers the income tax "the fairest" tax to increase.

The school did formula: The school aid formula, originally called the "resource equalizer," uses a complex calculus to account for a school district's wealth as measured by its local property tax base, its "effort" as measured by tax rate and its need as indicated by the number and type of students it educates. That latter factor is complicated by an arcane method of "counting" students: High school students count more than elementary pupils, for example, and the formula delivers a bonus to districts with concentrations of poverty. The school aid formula was designed to "equalize" resources supporting each child's education by channeling state dollars to those school districts that, because they were "property poor," could not raise the dollars available in districts with a substantial property tax base. However, changes to the formula over the years have tended to diminish its equalizing effects. Well-heeled schools, like those in the North Shore suburbs, have little stake in any effort to pour more money into the resource equalizer formula because, as a result of their substantial property tax base, they get little out of it. The editors

Edgar wants a minimum spending threshold of $4,225 per student, which would require a $400 million infusion of cash into the system. To pull that off, the state income or sales taxes would have to be increased by $1.9 billion. Of that, $1.5 billion would go toward property tax rollbacks, under the governor's plan.

Raising the income tax from its current 3 percent to 4 percent would raise about $2 billion a year, according to Illinois Department of Revenue estimates. For someone earning $600 a week, that increase would boost weekly withholdings by $6 or $312 a year. Another option, hiking the state's 6.25 percent sales tax by 1 percent, would generate $ 1 billion annually, assuming the state kept all of the proceeds to itself. (Twenty percent of the sales taxes now collected by the state go to local governments.) A percentage-point sales tax increase would boost taxes on a $2,000 computer from $125 to $145.

Edgar, who pounded his former Democratic opponent Dawn Clark Netsch in 1994 for pushing a similar school-funding tax swap, says he isn't wedded to any particular tax. In fact, he says he's willing to consider just about any kind of tax increase, as long as the proceeds go to schools.

"In my mode today, you could come in and say we ought to put a tax on elephants and mules," Edgar says.

A coalition of teachers' unions, school administrators and parents' groups want even more than Edgar.

Their proposal, which calls for raising the state income tax from 3 percent to 4 percent, carries a $2.2 billion price tag. Schools would get $1.1 billion of the total, leaving the rest for property tax cuts. That approach, which gives more to schools and less to property taxpayers than Edgar proposes, would boost the per pupil spending level to $4,500. That amount would increase the state's share of funding of public education to 42 percent, a significant step toward the groups' long-term

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goal of achieving at least 51 percent funding from the state.

"We want this money to go to classrooms, reducing class sizes, providing counselors, infrastructure, textbooks, science equipment— 101 different uses, and not necessarily teacher salaries. Honest to God, that's not our issue with this," says Bob Haisman, president of the Illinois Education Association, which is one of the groups touting the plan.

"It's not fair. In Illinois, where a child lives has everything to do with the amount of money the local school district is able to spend to educate that child," Haisman says.

Philip, who quickly castigated that proposal as "the Cadillac" of all school-funding plans, continues to balk at the notion of tunneling more money to education. He is not against raising statewide taxes for schools, so long as there is a dollar-for-dollar cut in property taxes.

"I'm for a swap. I'm not for increasing money for education, and I don't think my caucus is either. We're for a fairer way to distribute it," Philip says.

Those who would change the state's school-financing system say, despite Philip's assertions, it is impossible to give a meaningful lift to poor school districts without a net increase in dollars for education. They worry that the clash between the governor and Philip over this issue may pose a major stumbling block.

"There are people looking for any way they can to duck out of the way of this," says Randy Tinder, superintendent of Carlinville Community Unit District 1 and a leader of a coalition of school districts that tried unsuccessfully to convince the Illinois Supreme Court to force school-funding changes.

But on other points, Philip and Edgar agree. Like the governor, Philip has called the income tax "one of the fairer taxes" to consider increasing. However, Philip has floated a series of other taxing options. One would reimpose a $700 million state sales tax on food, which was eliminated in 1984. Another would impose a sales tax on the sale of state lottery tickets. And yet another would raise taxes on the state's most profitable riverboat casinos.

"I honestly will get a lot of heat on that from taxpayers," Philip said of an income tax increase. "When you talk about raising it, you get all kinds of nasty letters and telephone calls. You could probably put it back on food and not have as much heat. As you know, we took it off of food and drugs, I don't know what year, [but] we never got one thank you, 'Hello, how are you?' or anything."

The two GOP leaders also agree that homeowners, not large commercial property owners, ought to get the biggest windfall. House Speaker Michael Madigan, a Chicago Democrat, also backs that approach, though he still has not come forward with his specific financing plan.

The apparent consensus on the distribution of property tax rollbacks plays well with groups like the American Association of Retired Persons, which long has considered rising property taxes to be among the greatest burdens facing senior citizens.

"There's a great deal of concern among seniors living in their homes about ever-escalating property taxes. We would like to see that addressed," says Lots Ganyard, who monitors legislation for the AARP's Illinois chapter. "If the current tax system involving schools remains, it's a sure thing seniors will pay higher property taxes. But if it's shifted to a statewide tax, like the sales tax, at least they can control how much they spend."

In spite of the promise of lower property tax bills, the whole debate over school funding has caused jitters among suburban Chicago Republicans, whose school districts historically have not gotten much out of the school aid formula. The longstanding complaint in that region is that resi-

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dents pay income taxes to support a school aid formula that gives their schools very little aid in return, and those concerns are flaring anew with the latest call for change.

State Sen. Marty Butler of Park Ridge has been among the most vocal critics of an education-funding overhaul. In numerous newspaper columns, Butler pins the blame for poorly financed school districts on taxpayers who are unwilling to pass property tax increase referendums, as many suburban residents have, Chicago Heights notwithstanding.

"These refusals to support local education should not result in other taxpayers across the state picking up the tab for local taxpayers' refusing to assume more responsibility to local education," Butler says.

Butler's thinking is backed up by the suburban-based Heartland Institute, a conservative think tank that receives substantial funding from such corporate heavyweights as Amoco, Commonwealth Edison, Proctor & Gamble and Philip Morris.

"If a place like Barrington wants to spend $15,000 per kid, I don't have an objection to that. When you have a community where everybody has a swimming pool, I guess parents want their kids to go to a school that has a swimming pool, is carpeted and has air-conditioning. But let's not kid ourselves that every school needs all of that for a quality education," says Heartland president Joseph L. Bast.

The group predicts school-related tax increases, like those Edgar and others are promoting, will hurt the state's economy. A $500 million tax increase, a Heartland study purports, would reduce personal income growth by $3.5 billion a year and prevent the creation of 73,000 new jobs each year — considerations that have gotten little public airing.

Edgar, while upbeat about his ability to keep much of the attention focused on education funding early in the legislative session, barely hides his frustration at the suburban pockets of opposition. With the news cameras shut off and his State of the State speech delivered, the governor was in his Springfield office meeting with reporters when he made perhaps his most eloquent pitch yet for changes in school funding.

"There's no doubt some people will pay more taxes. The wealthy, the very wealthy, will pay more taxes probably under this plan. But I suggest everyone in the suburbs is not very wealthy," the governor said. "If we don't give the money to schools, we'll just have to build more prisons. We'll have to have more money for public aid. ... Even though all this money may not go to

Other facts: 1. Where Illinois stands nationally in per pupil spending: 16th Illinois average: $5,893 National average: $5.767 2. Where Illinois stands nationally in state support for schools: 46th Percent state contributes: 32.2% National average: 46% Only states with lower levels: New Hampshire (8.5%) and South Dakota (27.3%) 3.Where Illinois stands nationally in local support for schools: 8th Percent local government contributes: 58.7% National average: 46.7% 4. Where Illinois teachers' salaries stand nationally: 12th highest Average Illinois salary: $41,008 National average: $37.846 First national comparison is for the 1993-94 school year, the most recent year for which data is available from the U.S. Department of Education. The second and third national comparisons are for the 1994-95 school year. Salary comparison is for 1995-96, again using the most recent data available from the federal government. Source: The U.S. Department of Education, National Center for Education Statistics and National Education Association.

the kids right next door, maybe you need to be concerned about the kids 50 miles away. ... I think we have to look at the bigger picture. We're all part of Illinois. What happens in one corner of Illinois affects the other corner."

For educators insulated from the political wrangling that already is heating up, the problem of too little money from the state is something students and teachers have to live with every day. And if that daily reality is painful to folks in Chicago Heights, where Bloom High School spends $9,850 per pupil (22nd among high school districts), then they should visit St. Rose, a tiny farming community about 30 miles east of Collinsville, for a lesson in just how excruciating fiscal pain can get.

St. Rose Elementary District 14-15 spends a meager $2,932 per student, the lowest level of any district in the state. That has meant being unable to afford replacing decrepit equipment like old heating units or even making bathrooms handicapped-accessible, as federal law requires.

"Our bathrooms are really, really old and need to be redone. But it comes down to dollars. Do you spend our dollars on bathrooms or on buying textbooks?" St. Rose Superintendent Donnie C. Ostrom says.

Should Illinois legislators renege on their pledge this spring to pass any kind of substantive change to the way schools are funded, Lynda Byrd, principal of Bloom High School, foresees ominous consequences, perhaps pushing other school districts into the same state of near- collapse as her school.

"What's happening at Bloom will just be the tip of the iceberg," she says.

Dave McKinney is a State- house reporter for the Chicago Sun-Times.

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