Illinois State Board of Education

For Immediate Release
October 22, 2002
For Information: 217/782-4648

Cut Property Taxes by $3.5 Billion, Increase State Funding for Schools Substantially: Education Funding Advisory Board Report to Legislature, Governor

Chair calls for all state candidates to review and debate recommendations before for the Nov. election and into the 2003 legislative session

The state should provide a $3.5 billion reduction in local property taxes, a sizable increase in state support for schools and additional incentives to encourage school consolidation, the Education Funding Advisory Board said today in finalizing recommendations to go to the legislature and governor in January.

EFAB members hammered out the recommendations in Springfield Tuesday after more than two years of deliberations, several public hearings and extensive discussions by work groups looking in-depth at problems with the school funding system. Preliminary recommendations were issued by EFAB in August and discussed at three public hearings throughout the state in September. Preliminary recommendations were modified today to provide more specificity of recommendations for property tax relief and the foundation level increase for schools.

“We strongly believe that it is time that all policymakers stand up for the future of this state by acting to fix the way Illinois funds its schools,” said Robert Leininger, chair of the Education Funding Advisory Board and former State Superintendent of Education. “These recommendations are designed to provide the framework to fix the school funding system.

“Numerous studies over the last twenty years have all said we are too dependent on local property taxes and the state is not paying its fair share in supporting our schools. Illinois ranks 48th of the 50 states in the percentage of state support for schools.

“It is time to fix a broken system. It is neither fair to taxpayers nor to schools, and – most importantly – it is not fair to our 2 million students.

“I urge all state candidates to review these recommendations and debate them publicly before the November election and into the 2003 legislative session. Voters should demand that. Mere platitudes about education being a top priority will not prepare students to be successful. It takes a concerted effort from committed policymakers supported by a concerned public. Every survey that I have seen shows that the public overwhelmingly has that concern for the future. It is now time for our policymakers to stand up for the brighter future that strong schools can provide.”

EFAB proposes that local property taxes for education be cut by $3.5 billion and replaced dollar-for-dollar by the state. Illinois property owners pay about $9 billion in property taxes for education. No school would lose money or access to property tax support under the EFAB plan, since the state would replace the decreased property taxes dollar-for-dollar.

EFAB recommends that General State Aid be increased to support a Foundation Level of $5,665 per pupil – an increase from the present level of $4,560. The proposed level is based on studies of the spending practices of successful and efficient school districts. A variety of revenue replacement options were suggested by EFAB. Much could be generated by raising the income tax rate, closing loopholes and graduating exemptions. The sales tax rate could be reduced while providing additional revenue by broadening the tax base.

In addition, the recommendations call for the elimination of hold harmless and reinstatement of the continuing appropriation to assure districts of funding stability. A Department of Human Services poverty count would be used for calculating poverty grants for districts, rather than the ten-year census count.

The combination of property tax relief and state revenue increases assures that the state would provide the majority of funding for elementary and secondary education.

Unit districts are the preferred school district organizational structure with high schools enrolling a minimum of 250 students, according to EFAB. Rather than requiring schools to consolidate, EFAB recommends a reasonable approach by expanding the incentives for reaching these targets. Presently, the state has 893 school districts, 407 of which are units while 103 are high school districts and 383 are elementary districts. Having all unit districts would simplify the funding mechanism, increase equity among districts and provide efficiencies in the delivery of services.

To accomplish this reorganization, EFAB proposes that the current incentives be continued and additional incentives be added and that feasibility studies be required in all districts. If consolidation resulted in the need for a new building, EFAB proposes that the state fund 100 % of the cost of the building. In addition, a state implementation grant should accompany the reorganization and the new district should get a five-year exemption from the state designation system.

While many categorical programs remain unchanged, the recommendations provide for a new transportation formula and a study to combine special education funding sources. Combining some existing programs into block grants would increase the flexibility for local school districts while reducing the paperwork necessary to receive state funds.

Other recommendations include a simplification and reorganization of school district accounting and reporting procedures through a reduction in the number of levies and accounting funds.