Ralph Martire, an enthusiastic numbers cruncher, had just finished explaining the details of his school finance reform plan at a town meeting in Grayslake when state Sen. Wendell Jones weighed in.
Martire’s plan, which would lower property taxes and raise the state sales and income taxes, may make economic sense, said Jones, a Republican from northwest suburban Palatine. But it would fail politically, he continued. “Here’s why,” Jones explained, turning to the audience of 75 to 100 people. “Who’s willing to pay higher sales and income taxes?”
Virtually everyone raised a hand, Martire recalls. “And [Jones] thought no hands would go up. Voters are more sophisticated than we give them credit for.”
Through gatherings like these, Martire’s organization, the Chicago-based Center for Tax and Budget Accountability, and dozens more hope to succeed where like-minded advocates repeatedly have failed in the past. They want the state to raise income and sales taxes both to provide property tax relief and to raise the level of school funding for hundreds of poor districts without siphoning money from rich districts.
“The state has needed [this] for the past 30 years but has been unable to generate the political willpower,” says Martire.
Organizers of the new campaign, called A+ Illinois, plan to barnstorm the state, build a broad coalition of support and raise public awareness before approaching the Legislature.
A+ learns from past mistakes
MarySue Barrett, president of the Metropolitan Planning Council, another coalition leader, says A+ learned a few lessons from “past efforts that have not gotten to the finish line.”
For one, A+ broadened its base beyond “education-connected leaders” to include advocates for such issues as housing, health care and social services.
These related services suffer from the same tax structure that afflicts education, Martire notes, and their advocates have come to recognize the interdependence of all their work. “That is new, and that’s very powerful,” he says.
A+ also is trying to build support for the concept of finance reform before getting too specific. “If you get into those details too soon, before the public is really with you on understanding the nature of the problem, then it can be labeled and tagged as unworkable before the debate has begun,” Barrett says. “We’re saying, ‘Let’s set the table first.’ Our expectation is that this is more than a one-year effort to create momentum for change.”
The coalition is targeting the Legislature rather than the state constitution or the courts because all routes lead there eventually.
Besides, any effort to get Illinois courts to boost money for schools “is not likely to succeed,” says Dawn Clark Netsch, a former Illinois comptroller who made overhauling the education funding system a central part of her unsuccessful 1994 bid to unseat Jim Edgar as governor.
Netsch, now a Northwestern University law professor, notes that the Illinois Supreme Court repeatedly has refused to enter the education-funding debate, leaving the matter to the Legislature.
Blagojevich the big obstacle
One large—and perhaps insurmountable—obstacle stands in the way of the A+ efforts: Gov. Rod Blagojevich’s opposition to raising the sales or income taxes.
“The reality is that the legislative process in a lot of ways begins and ends with the governor,” explains Steve Brown, spokesman for House Speaker Michael J. Madigan, D-Chicago, who shepherded a measure to swap higher state income taxes for lower property taxes through the House in 1997.
Lawmakers usually don’t pass highly controversial proposals if they know the governor is opposed to them, because they likely would have a hard time gathering enough votes to override a gubernatorial veto, Brown notes.
The governor repeatedly has called for an overhaul of the state’s education bureaucracy, so it would report directly to him. In March, he told the Senate that his proposed reforms, slated to take effect in 2006, must be instituted before school finance reform could ensue.
“Unless we change the system, unless we instill a culture of accountability, until we create a culture of innovation, the ongoing discussion on how we fund schools will continue to ring hollow to the taxpayers,” he said.
However, as longtime Springfield watcher Charles N. Wheeler III reads the situation, Blagojevich’s political advisors think it is more important for him to keep his campaign pledge not to raise the income or sales taxes than to please allies in the finance reform movement.
The governor’s proposals are a way “to blunt whatever criticism he might come under for not addressing the underlying problem of school finance,” says Wheeler, director of the Public Affairs Reporting program at the University of Illinois at Springfield.
Regardless, the governor has made no guarantees that he would take on the finance issue even if he gets his reforms.
Advocates for the tax swap acknowledge the difficulty that Blagojevich’s position presents. They hope to generate excitement at the grassroots level and then show the governor that the idea has broad support. One measure of public opinion is a February Chicago Tribune poll that found that more than half of Illinois voters support trading higher state income taxes for lower property taxes and adding money for schools.
And history shows that raising the income tax is not the “third rail” of Illinois politics that many suppose it is, suggests Wheeler. Gov. Jim Thompson won election after hiking payroll taxes, and Edgar successfully campaigned on making a temporary tax “surcharge” permanent, Wheeler notes.
Edgar says legislators hard to convince
But poll numbers and history might not be enough to convince Blagojevich and other politicians. Edgar said his staff showed legislators the results of polls conducted in their districts that showed support for his 1997 finance reform proposal, which added accountability measures to Netsch’s finance scheme. “They’d say, ‘Yeah, that’s now, but once the tax passes they’re going to be mad,'” Edgar recalls.
Even so, Edgar insists that his plan would have become law if Senate President James “Pate” Philip, R-Wood Dale, had let it come up for a vote on the Senate floor. But Philip decided the plan would be bad for suburban schools, so he blocked it.
After leaving Springfield for the summer, Senate Republicans came under fire for not acting on the measure, so later that year they agreed to a proposal that set a minimum amount of money, called the “foundation level,” that school districts should spend on each student. If local taxes didn’t provide that much, the state would kick in the rest. Edgar signed the measure.
Since then, Philip has retired, and Democrats now control both the House and Senate. “There’s no doubt that if I had the [current] legislative make-up, I would’ve passed the [tax swap] bill,” Edgar says.
The fault lines in the school finance debate often fall along geographic, rather than partisan, lines.
Edgar maintains that 10 Republicans in the 59-member Senate were ready to vote in favor of his 1997 proposal. On the other hand, Democrats who represent affluent suburbs—some of the most politically vulnerable members of the Legislature—probably wouldn’t support a higher income tax.
Many suburbanites moved to their communities in order to give their children a quality education, and the high value of real estate in those areas provides an ample tax base to pay for good schools. Relying more heavily on statewide taxes would almost certainly decrease the money available for affluent suburban districts.
“Heck, there’s no way the state could have the money to bring everybody up to New Trier [standards]. And if you take New Trier down to the average, there’s a lot of other suburbs that are going to come down, and that sends people off” in the Legislature, Edgar says.
New support in the suburbs
However, the A+ coalition believes the issue is ripe politically because the Democrats control Springfield and because a broader swath of school districts would benefit. With three out of four districts in the state in the red, even north and northwest suburban districts might be supportive.
Neil Codell, superintendent of Niles Township High School District 219, says he supports a tax swap “in theory” but adds: “We want to know what we’re going to get back.”
As a March 16 tax referendum approached, Codell’s district, which has a median home price of $224,000, was contemplating such measures as limiting students to five courses plus physical education, combining sports teams at Niles North and Niles West high schools, and eliminating extracurricular arts. (The referendum passed.)
The North Cook Superintendents Association agrees with the governor that some kind of administrative reform is needed first, says Max McGee, Wilmette School District superintendent, former state schools superintendent and president of the North Cook group. “This group is very skeptical of an income tax increase in return for a property tax rebate,” he says. “They’re thinking, as I am, that you need to have some other things in place first.”
A more broadly based suburban group echoes that sentiment, supporting a tax swap only if it includes a guarantee that suburban schools would not lose money. “Our school districts recognize the need for equity statewide. But it has to be a bringing up of the bottom and not a leveling down,” says Donna Baiocchi, executive director of a consortium of 114 suburban districts, mainly in Cook, Lake and DuPage counties, that is known as Ed-Red, for Education Research and Development.
Business community hanging back
Often, downstate Republicans support higher dependence on the income tax. But in 1997, many were hesitant to sign on because the top GOP leaders in both chambers, who exert a lot of power, hailed from Chicago suburbs. Now those leaders have changed, weakening the suburbs’ control of the GOP agenda.
The business community, traditionally supportive of Republicans, played a key role in promoting Edgar’s plan, the former governor says. It signed on after Edgar pledged support for other reforms they supported, including higher standards for teacher recertification.
Today, different sectors of the business community have slightly different takes on a tax swap, but all are concerned that property tax relief might save them less than an income tax hike would cost. With dozens of business-related fees hiked last year and a potential increase in the corporate income tax this year, businesses are wary of any plan to make them pay more.
“We believe in local control and local taxation, and we don’t trust the state,” says Douglas Whitley, president and CEO of the Illinois State Chamber of Commerce.
Even with broad support, many observers insist, the fate of any funding reform rests with Blagojevich. “I’ve got to say, all of this is kind of minor, or just kind of insignificant, as long as the governor’s sitting out there saying he’s against it,” says Edgar.
Ed Finkel is a Chicago-based writer. Daniel C. Vock is the Statehouse bureau chief for the Chicago Daily Law Bulletin. To contact them, send an e-mail to firstname.lastname@example.org.