I welcome this opportunity to address my fellow Illinoisans because it offers me the opportunity to outline a tax policy initiative that provides much needed funding for our school children through a sweeping overhaul of the tax structure in Illinois. I am also going to ask for your feedback and your help. I believe that this initiative will benefit people all across Illinois, and I know that it cannot succeed without your support. Yes, I am trying to recruit you to join our efforts.

The basic problem with the current tax structure is this: a combination of high property taxes, an individual income tax with low personal exemptions, and a narrow sales tax with high rates has created a structure that places a higher burden proportionally on the families with the lowest incomes. In addition, the over reliance on the property tax creates two significant problems.

First, it produces huge disparities among standards of education — even with a state aid formula that seeks to even out these disparities. Simply put, children living in areas with high levels of property "wealth" receive a better education than those who live in areas where property values are not as great. Secondly, this disparity exists among many downstate communities as well as in Cook County. Our unbalanced tax structure and unfair funding of education diminish Illinois' ability to compete economically.

As a county tax assessor, believe me, a lot of taxpayers do appeal their assessments vigorously, persistently and vehemently. So I know how deeply - particularly with the skyrocketing values of real estate - our over-reliance on property tax hurts taxpayers, especially our senior citizens. I spend time with them every day.

But the extent of the problems caused by our state's tax structure was brought home to me during a recent visit to a number of different school boards. I shall never forget how deeply I was moved witnessing the meetings of two different school boards in Cook County. One dedicated group was engaged in deep discussion about where they should put their third swimming pool.

The other dedicated board was trying to figure out where they could find enough money to keep their school open for another month. This kind of disparity is not just. It is not American. It radically violates the spirit of our American promise of equal opportunity.

I have vowed to work towards making sure that no child's opportunity for success would depend upon the wealth of his or her community's property tax base. Each of our children deserve the opportunity to take advantage of a quality education.

Our office has constructed a framework, entitled the 2003 Tax Restructuring Proposal, founded upon the following principles:

1. To reconfigure the state and local government revenue structure in order to create a better and fairer system to fund education;

2. To provide a more equitable way to raise the necessary funds for government services;

3. To develop a moderate, stable, more balanced and responsive tax structure that diversifies the base, meeting current spending obligations. Preliminary research offers us the ability to change the mix of Illinois' three major taxes to provide a more equitable funding mechanism for schools and a more balanced state tax structure. The framework of our proposal suggests the following:

Tax relief totaling $7.3 billion with the following reductions:

• -$4.5 billion in property tax relief;

• -$1.5 billion in individual income tax relief (primarily targeted to lower income families);

• -$1.3 billion in sales tax relief.

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James M. Houlihan is the Cook County Assessor. He served three terms in the state legislature, was the Assistant to Chicago Mayor Harold Washington and a Tax Reformer with the Fair Equity Tax Commission. He was President of All-Circo, Inc. and is a graduate of St. Mary of the Lake Seminary.

The opinions and views of guest commentators are their own and may not represent those of the Association of Illinois Electric Cooperatives or the electric co-ops of Illinois.

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ILLINOIS COMMENTARY Continued from page 4

This reduced revenue would be offset by $8.8 billion in tax enhancements:

• +$4.3 billion increase in the income tax (primarily targeted to business and higher income individuals, closing some corporate loopholes);

• +$740 million in the existing sales tax;

• +$3.8 billion increase by broadening the sales tax to include a variety of services.

The remaining difference, $1.5 billion in actual revenue gain, would be distributed as increased state aid to schools, with the state's poorest schools as the major beneficiaries.

Our framework for restructuring state taxes envisions a change in the way Illinois funds its schools, fulfilling the mandate of the Illinois State Constitution (1970) that the state should be the primary source of educational resources. We would move from an approach that utilizes state dollars in order to equalize education resources to a system that funds schools primarily on a per pupil basis. The above cited revenue changes are designed to increase state funding of education by $6 billion, raising the total allocation of general state aid from $3 billion to $9 billion while increasing the state's share of education costs from 38 to 65 percent.

By fulfilling the changes to the tax structure listed above, property taxes would be reduced statewide by 25 percent. The general state sales tax rate would be lowered from 5 percent to 4 percent. The excessive burden on families with the lowest incomes would be reduced (helped in part by a broadening of the Illinois Earned Income Tax Credit) and, most importantly, educational resources for Illinois children would be more evenly distributed. Moreover, an educated work force and a moderate property tax rate would enhance Illinois' ability to compete economically. These benefits would be realized while all three major taxes — property, sales and income — would fall below the median of the 50 states.

Necessary changes to our system of taxation will not happen without your involvement. I encourage us all to invest the necessary time and energy to make this a reality. A child's opportunity for success must not be dependant upon the wealth of his or her community's tax base.

Please send your comments and/or express your support by e-mailing Project2003@ cookcountyassessor.com. If you would like further information on this proposal, just let me know. I very much look forward to hearing from you.

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