Issue Position: Funding Schools During Difficult Economic Times

Issue Position

Like nearly every other state in the nation, Illinois is adjusting to the most significant economic downturn since the Great Depression. The troubled economy has caused serious challenges for our state's budget. However, under the leadership of Illinois Senate President John Cullerton, the FY 2011 state budget maintains level funding for schools.

Education spending accounts for approximately one-third of Illinois' total budget. While some have advocated drastic cuts to state support for schools, Senate Democrats put a hold on these ill-conceived plans. In May, the General Assembly passed a budget that does not reduce spending on General State Aid to schools. This total amounts to slightly more than $9.3 billion.

Funding cuts may be seen in mandated programs like transportation and special education, or programs proven to enhance student success like early childhood education and reading improvement unless a bi-partisan coalition of lawmakers in the Illinois House of Representatives follow the lead of the Senate in passing an increase in cigarette taxes. These increases could produce enough revenue to cover much of the costs to ensure that key education programs are not cut.

One approach that 31 Illinois Senate Democrats supported last year helps put Illinois on the right track when it comes to investing in schools and stabilizing the state's budget:

House Bill 174 -- Comprehensive Revenue Reform

A measure that could invest more than $2.5 billion to schools annually

Many experts agree that, as the 5th largest state in the nation, Illinois maintains an outdated revenue system. Even during economic growth, revenue often doesn't keep pace with the costs of critical state services. It's not necessarily the case that spending is too high, it's what many call the "structural deficit."

The fact is Illinois has the lowest income tax of any state in the nation. Unlike our Midwestern neighbor states, Illinois doesn't place fees on most services (services are increasingly the foundation of the state's economy). To stabilize the state budget and commit to a long-term investment in schools, 31 Senate Democrats supported House Bill 174.

This legislation would generate $5 billion dollars in new revenue by raising the individual income tax by two percentage points. This revenue would be used to draw down the $12-$13 billion deficit and allow the state to continue to maintain critical programs and services.

The bill would also provide substantial property tax relief for Illinois' residents. It doubles the Property Tax Credit from 5% to 10% and makes it fully refundable to help seniors and others without income tax liability. Overall it will provide $700 million in property tax relief to the people of Illinois.

House Bill 174 would reform the state's tax system to change the way it currently funds education and maintains a consistent revenue source for Illinois children. This commitment includes increasing the Foundation Level from $5,959 to $6,190 in the first year alone and providing more than $2.5 million annually in new education funding over the next several years. Currently, Illinois ranks 49th of the 50 states in the state-contributed portion of school funding.

To get serious about investing in education, lawmakers will have to consider revenue modernization and comprehensive reforms. House Bill 174 is a blueprint for these reforms.

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