Education Finance Reform & District 70


I attended Candidates’ Night at Kishwaukee College last week. The 70th District* candidates were there along with DeKalb County Board candidates, county clerk and county treasurer, and two judges from the 16th Circuit. One of the more interesting parts was how little it can matter what party you belong to when it comes to countywide issues. No one party has a monopoly on conservation, farmland preservation, management of the growth of government, support for veterans or the jail referendum. At this level, a good (or bad) idea can just be itself.

For me, the meat served up that night came from Rep. Bob Pritchard and Chuck Sauer, the pharmacist/attorney who is after Pritchard’s seat in the 70th District.

HB/SB 0750 is a bill introduced last year into both the Illinois House and Senate that would shift some of the funding for education from the property tax to the income tax. It is described as bi-partisan although as far as I can confirm at the moment the only non-Democrat among its 17 or so sponsors is Sen. James Meeks who is an Independent. Here is a synopsis of the bill as originally introduced to the Illinois General Assembly:

Amends the State Finance Act. Creates the School District Property Tax Relief Fund. Requires the General Assembly, in FY06, to appropriate $2.4 billion from the education appropriation minimum to the School District Property Tax Relief Fund and to appropriate additional amounts each fiscal year thereafter. Requires the Department of Revenue to annually determine and certify the total amount of property tax relief grants that each school district will receive from the Fund. Sets forth procedures for appropriating these grants. Amends the Illinois Income Tax Act. Provides that for taxable years beginning after January 1, 2005, the rate of income tax for individuals, trusts, and estates is increased from 3% to 5% of the taxpayer’s net income and the rate of income tax for corporations is increased from 4.8% to 8% of the taxpayer’s net income. Includes retirement income within the definition of base income for individuals with an adjusted gross income of $75,000 or more annually. Eliminates certain exemptions for corporations located in Enterprise Zones or federally designated Foreign Trade Zones. Creates the Family Tax Credit, which is a refundable tax credit available to any natural person or married couple filing jointly that reports a total annual income of $47,000 or less. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers’ Occupation Tax Act. Eliminates exemptions concerning newsprint and ink and concerning manufacturing and assembling machinery. Includes certain arts, entertainment, and recreation services within the definition of sale at retail in the Retailers’ Occupation Tax Act. Amends the Property Tax Code. Requires the county clerk to abate the extension for educational purposes for each school district in the county by the amount of the property tax relief grants received by each of those school districts. Amends the Motor Fuel Tax Law. Deletes provisions concerning discounts for timely filing and paying the taxes. Amends the School Code. In the State aid formula provisions, increases the foundation level of support and grant amount for supplemental general State aid. Provides for an education appropriation minimum and supplemental State aid for rapidly expanding school districts.

Is this a good idea? I’ve got a few quibbles with the details but let’s look at the big picture. The state, which is supposed to foot 50% of the bill for education currently reaches a measly 36%, placing Illinois 48th in national ranking on state funding. There’s been a corresponding over-reliance on local taxing districts and we are cannibalizing ourselves in trying to keep up. My new neighbors recently fled here from parts east because they had reached a property tax bill of $10,000 annually on a modest three-bedroom home not unlike my own. With growth driving property values up as they are, how long before they (and we) must flee again?

Chuck Sauer says that passage of this bill would shift $30 million taxpayer dollars in District 70 from property to income tax, with $10 million in annual savings for the property owners here. He derives his estimates from figures provided by the Center for Tax & Budget Accountability, a bi-partisan research and advocacy think tank.

The undertone of Sauer’s remarks seemed to ask Pritchard, “Why aren’t you trying?”

Rep. Pritchard didn’t come out against HB/SB750, exactly, except to say that it is “dead in the water,” that it has no majority support and that cuts and reforms in “delivery of education” should be considered such as prioritizing core subjects and scheduling. Most ominously, he suggested that even if the law passes, the General Assembly might not return the new income tax revenues to the districts.

Let me see if I can translate that. “Don’t pass any bills like this because the state of Illinois might not follow the new law anyway.”

I’ve watched and listened to Bob Pritchard and I’ve thought about him on and off for the past week since Candidates’ Night. Although he is good at PR and is known in some circles as “Mr. Photo Op,” I believe he cares very much about the job he is doing. Although he has many corporate donors to his campaigns, I believe he votes on the business side because he truly believes that creating the perfect climate for business will cure all that ails us. And when it comes to the question, “Why aren’t you trying?” I believe Mr. Pritchard’s refusal to sponsor bills like HB/SB750 arises from a deep pragmatism that doesn’t allow him to spend time on legislation he deems a “lost cause.” He doesn’t want to waste his time, IMO.

The trouble with pragmatism is that it tends to maintain the status quo and when it comes to property tax relief we cannot afford to maintain it any longer. I don’t want to flee. I want somebody in the job who’s going to bang on that education finance reform drum every day, regardless of the perceived odds, until enough people in Springfield are marching to the same beat. I’m voting for Chuck Sauer.

[*The 70th District covers much of DeKalb and Ogle counties and a little of LaSalle county. Bonus links: Here’s Bob Pritchard in the Chronicle and here’s Chuck Sauer in the Chronicle]