Reform bill aimed at funding, tax relief

Skeptics weary of their income going to supporting schools

Most people probably would think otherwise, but Ralph Martire claims Illinoisans aren't taxing themselves to death.

Nationally, Illinois ranks 45th in state taxes paid per person as a percentage of total personal income, and ranks last in income taxes paid of the 41 states with such a tax, said Martire, Executive Director of the Center for Tax and Budget Accountability.

The problem is tax structure and reliance on local property tax-- the same reason Illinois schools are underfunded and under-performing, according to proponents of two bills aimed at education funding reform.

House Bill 750 and Senate Bill 2288 -- it is purported -- would provide property tax relief while creating billions in new revenue for schools. The driving force would be an increase in state income tax -- from three percent to five percent -- and new taxes on the now-untaxed service industry.

Proponents say the revenue would come directly out of residents' local property tax bills, as a visible line item sum paid by the state.

"What you see is the state really dropping the ball on its responsibility to fund schools, and pushing that responsibility down to local taxpayers," Martire said recently at a public forum hosted by Illinois Sen. Michael Noland, D-Elgin. "Most folks are getting killed in the current system. Most folks are getting killed with property taxes."

Martire said that as the bottom dropped out of the manufacturing-based economy in the last 20 years, the service industry began to grow. And because services aren't taxed in Illinois, as they are in other states. Springfield isn't collecting revenue from the tax base in the modern economy, he said.

Sen. John Milner, R-Bloomingdale, said he appreciates the intent of those who crafted the legislation, but has to listen to his constituents. He added that he thinks his would become a "donor district," where tax dollars are sent to Springfield but don't return.

"That (the legislation) should be brought up for discussion and debate-- do people want to pay more in income taxes?" Milner said in a recent telephone interview. "My opinion, based on my conversations so far, is no, people do not want to pay more income taxes."

Milner and other skeptics say they fear the property tax relief will last only a few years while the income tax hikes will be set in stone, but Noland said such would not be the case.

"This is permanent," Noland said in a telephone interview. "One goes with the other ... I will not support anything that is remotely an income tax increase without a property tax decrease."

Milner said the bottom line is that pumping more money into school districts won't necessarily improve education.

"Money is wasted in many districts," he said. "We have to address spending issues before we create new revenue."

Noland said he understands the concerns of those who don't want to pay a higher income tax, but added that he believes a better-funded school system would do wonders for Illinois' economy years down the road. For the near future, he said, the measures come down to creating a more fair tax structure.

"This really does turn into a class issue, unfortunately," Noland said. "And we're not the ones making it so. It's the more affluent districts."