The state of the State            

Edgar's education funding plan little more than more of the same By JENNIFER HALPERIN

The month of May brought plenty of hot air to Illinois' capital city from the mouths of people across the spectrum. Some of it came in the form of hateful speeches: The Ku Klux Klan returned to the steps of the Statehouse, spouting its divisive dogma. Some came in the form of partisan bickering: Arguments between Democrats and Republicans in the House of Representatives took on a decidedly nasty tone, at times becoming personal and insulting. And some came in the form of Gov. Jim Edgar's education plan — a proposal roundly criticized in the media as being little more than a call for more of the same when it comes to money for education .

The plan calls for the allocation of at least 36 percent of the state's tax receipts to elementary, secondary and higher education in Illinois. At this level, the governor said, an extra $1 billion would be generated over the next four years through natural revenue growth. The governor's plan also would set up a pool of money from riverboat gambling proceeds from which elementary and high school districts could draw funds if they come up with matching dollars. The money could be used to buy computers and other technological instruments for classrooms, and for capital improvements like building renovations and expansions.

Here's why this offering has been labeled a do-little proposal: Edgar said the extra $1 billion in natural revenue growth would be raised over four years, so $250 million would be split annually among elementary, secondary and higher education. But that's really no different from what he proposed in his state budget for fiscal year 1994-95, which sought a boost in education funding of almost exactly that amount. The pool of money to be funded with riverboat gambling proceeds would include all growth in money now raised through the state's 20 percent tax on riverboat gaming revenues. Edgar said the plan would raise about $500 million over the next five years if additional riverboats are authorized this year, and nearly $200 million without the additional riverboats.

Edgar said the extra $1 billion in natural revenue growth would be raised over four years, with money split annually among elementary, secondary and higher education. But that's really no different from what he proposed in his state budget

This part of the proposal may have signaled Edgar's devotion to expanding riverboat gambling to Chicago and other locales, but it leaves school districts in the position of having to raise matching revenues to access the money. Affluent districts would be called upon to match more than 50 percent of the state's portion, while poorer districts would need to come up with less than a 50-50 match. So school districts probably would have to think about raising their portion of the matching funds through property taxes — unless they happen to have a large chunk of change sitting around. And rising property taxes have raised the ire of many Illinoisans lately, including many members of the governor's own political party. Property tax caps imposed in the suburban collar counties exemplify that sentiment. Edgar was proud of the fact that his plan doesn't call for an income tax increase, as does the plan advocated by his Democratic opponent in November, state Comptroller Dawn dark Netsch. She wants to raise the state income tax to 4.25 percent from 3 percent for individuals, and the corporate income tax to 6.8 percent from 4.8 percent (not including the 2.5 percent personal property tax). Netsch says the governor's plan wouldn't provide nearly as much money for education as hers would.

8/June 1994/Illinois Issues

Under Edgar's proposal, elementary schools, high schools and higher education would share a "guaranteed" $250 million in extra money each year. Netsch's plan would give four times that amount every year just to elementary and high schools, plus extra money toward property tax relief and graduated income-tax exemptions.

Let's say Edgar had offered to dedicate all $250 million in natural revenue growth just to elementary and high schools. And let's say additional gambling riverboats are authorized, and the governor's full $500 million estimate is generated over five years for the matching-fund pool, broken down into $100 million a year. And let's say elementary and high school districts raised enough money to access every penny of the pool. That still would leave schools with $450 million in new money in one year — including $100 million districts would have to raise on their own. Compared to Netsch's offering of $1 billion a year for education plus the extras her plan includes, the governor's plan looks paltry. It doesn't include an income tax hike, to be sure, but half of it leaves open-ended the question of whether people would see hikes in their property taxes. That same half also depends upon the uncertainty of riverboat gambling revenues.

The Edgar plan as a whole contains few certainties outside of giving him something to point to when Netsch asks where his education plan is. While the comptroller's plan offers to use a defined amount of new tax dollars for education and other purposes, the governor's suggestions are based on an unclear amount of new money becoming available without a tax increase.

No matter whose education funding idea they prefer (if either), voters who are concerned about generating more money for schools probably should be grateful to Netsch for bringing the issue to the forefront. If not for her plan — originally assessed as an instrument of political suicide — the gubernatorial campaign season may have been taken up with far less weighty matters.

June 1994/lllinois Issues/9