PI Original Angela Caputo Tuesday May 19th, 2009, 4:01pm

School Funding Reform Gains Ground In Budget Negotiations (UPDATED)

As the General Assembly's unofficial champion of school funding
reform, Sen. James Meeks (D-Chicago) has been upfront about his support
for an income tax hike -- but only if lawmakers commit to eventually using the extra revenue to fix the state's inequitable ...

As the General Assembly's unofficial champion of school funding reform, Sen. James Meeks (D-Chicago) has been upfront about his support for an income tax hike -- but only if lawmakers commit to eventually using the extra revenue to fix the state's inequitable education funding formula. Some state officials have been warming to the idea, knowing that they'll be doomed politically if they raise taxes without major policy changes to show for it. But there is an encouraging sign that Meeks isn't the only lawmaker seeing a "now or never” opportunity to recalibrate the way schools are funded: SB 750 has been primed for final-hour budget negotiations and is up for a committee hearing tomorrow.

Signs that Senate Democrats may be coalescing around the plan first emerged last week, and then again Sunday, when two amendments were tagged onto SB 750. On the revenue generating side, the 244-page bill now contains provisions for raising the income tax rate by two percentage points -- bringing it up to 5 percent (rather than Quinn's proposed rate of 4.5 percent) -- and expanding the sales tax base to include some consumer services (haircuts, lawn care, movies, etc.). To offset the higher taxes for lower-income Illinoisans, the state's Earned Income Tax Credit (EITC) would be increased from 5 percent to 15 percent of the federal credit and property tax credits for homeowners would be doubled from 5 to 10 percent.

State School News Services' Jim Broadway has the details on how schools would benefit from the "new and improved" bill:

For schools relying heavily on state support, the bill would phase in raises to the “foundation level” from the current $5,959 per student to $8,410 by 2013-2014, and then index future foundation level and poverty grant increase to the ECI (federal measure of employment costs).

Early childhood funding would be increased in phases also, adding $180 million to base spending and then indexing that to the ECI. School district’s reimbursement for special education personal [sic] would be doubled, again in phased increases, with ECI-driven increases after 2014.

Those benefits wouldn't be realized immediately, as the state still has a $12 billion budget hole to dig out of. Within 18 months, however, the state's finances should be back on track and schools would be able to access the operating funds, along with a $1 billion a year school construction fund. Higher education will also stand to gain an additional $300 million a year.

Considering the way SB 750 has been manipulated for political gain in the past, skeptics like Broadway have questioned whether the proposal really has a chance or is being used to make Quinn's still unpopular budget proposal seem like a compromise. But Sen. Don Harmon (D-Oak Park) told us last week that he projects getting "more votes" on Meeks' bill from his caucus than the governor's alternative. (There are currently 18 co-sponsors in the upper chamber, only 12 short of what's needed for a majority.) And we hear that internal polling by the Senate Democrats appears to back up Harmon's claim. In the other chamber, Reps. David Miller (D-Dolton) and Roger Eddy (R-Hudsonville) have taken up lobbying in favor of the proposal, but it's still unclear where the House caucus stands.

The bill moves onto the Education Committee for debate tomorrow. Members of the statewide Better Funding for Better Schools coalition are hoping to keep the momentum going by flooding elected officials with calls from supporters. "The hope is that when Quinn sees that there is support for this and that the Senate will back it, he'll move in that direction," coalition member and Center for Tax and Budget Accountability executive director Ralph Martire tells us.

We'll be watching closely.

UPDATE (Wednesday, 2:45): Moments ago, the Senate Education Committe passed SB750, which is now headed to the floor for a vote. We'll post more details as they emerge.

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