Suburban schools question Quinn's tax swap call

Friday, August 27, 2010

Suburban school officials are a little leery of Gov. Pat Quinn's call to link an income tax hike and property tax cuts.

While they welcomed the idea of property tax relief, they also expressed concerns about becoming even more dependent on state funding, as Illinois remains more than $774 million behind in payments to schools for the 2009-10 academic year.

"The difficulty is that we have become very accustomed to local property taxes being the most stable form of revenue that districts have," Elgin Area School District U-46 spokesman Tony Sanders said.

Quinn, a Chicago Democrat, has proposed a 1 percentage-point tax increase, to 4 percent. The hike is estimated to generate an additional $2.8 billion, money he wants set aside for schools.

At a candidates forum in Bloomington on Wednesday, the governor said he would seek legislation requiring schools to cut local taxes in order to get more state aid.

Quinn hasn't yet given any more specifics on the plan, including how much he expects districts to cut, or what would happen if they'd fail to comply.

Still, the whole idea seems like a gamble, U-46 board President Ken Kaczynski said.

U-46, the state's second-largest district behind Chicago Public Schools, is often well into the fall before it knows how much state aid it's going to get.

With school district budgets being finalized each summer and rubber stamped by boards in August or September, he said, it would be "extremely difficult" to get a handle on the funds they're getting.

Besides, with a $13 billion deficit and piles of unpaid bills, the state often has failed to deliver in a timely fashion the money it promises to school districts.

State Board of Education spokeswoman Mary Fergus said as of Aug. 23, Illinois was $773.9 million behind in payments to schools for the fiscal year that ended June 30. Some bills, Fergus said, go as far back as Feb. 10.

Brian Battle, board president of Barrington Unit District 220, said the district has traditionally opposed legislation that would modify school funding from its current reliance on property taxes to either sales and income taxes because of two factors.

"One is, we believe property taxes are the most stable form of funding for schools. As the state budget is showing now, sales and income taxes are subject to a lot of economic factors, that would allow it to fluctuate pretty significantly from year to year."

Secondly, Battle said, as one of the state's wealthiest school districts, the board believes more of a burden would be placed on Barrington 220 taxpayers by the tax swap idea.
According to 2009 state report cards, more than 81 percent of Barrington 220's funding came from local property taxes. Less than 9 percent came from the state.

North Chicago District 187, on the other hand, gets just 27 percent of funding from local property taxes. The state supplies another 45 percent.

"We are the poster child for funding and resource needs," North Chicago High School Principal Dan McDermott said.

"We've been waiting for this conversation to occur. The well-to-do suburban districts, they're getting 10 and 12 percent appreciation on property. We need so many resources to even compete."

Still, he feels the effects of any tax-swap law would take some time to materialize.

"I'd like to see the layout, the nuts and bolts, the step-by-step process," he said.

Quinn's opponent, Republican Bill Brady, called the proposal "a lot of smoke and mirrors," something that "doesn't seem to make sense."

Brady has called for an overall 10 percent cut to the state's budget, a proposal Quinn has criticized because it will cut education funding.