Tax swap proposal divides down Harlem Avenue

? One lobbyist says support of the measure, or lack thereof, lies in willingness to believe in state government. Bill's author disagrees.

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Just about everybody is for lower taxes. More funding for schools? Often a big hit.

But a proposal to shift the tax burden to lower property taxes, increase school funding and help with the state's budget woes elicits incredulity with some area residents and school officials.

"It's a matter of degrees of faith," said Donna Baiocchi, executive director of ED-RED, an advocacy and lobbying organization that Oak Park and River Forest schools are members of.

"I want to be Walter Mitty and believe," Baiocchi said of one "tax swap" proposal, HB 750, which currently lies in abeyance in the Illinois General Assembly. "Why have faith the legislature will fund property tax relief when they won't fund constitutionally guaranteed pension funds?"

The state is some $36 billion in arrears in funding its employees' pension fund, and Gov. Rod Blagojevich's budget has a $1.1 billion operating deficit.

But in Oak Park, there are believers.

"I believe sustainable and enforceable legislation can be written by this legislature," said Dan Burke, a member of the District 97 Board of Education. "I'm not a skeptic about this bill."

Burke and the district's Legislative Action Committee are gathering believers to bus down to Springfield May 18 for the "Day for Illinois Children," when proponents of HB 750 statewide will push for support of the bill.

"We're going school by school to fill the bus," Burke said, adding that they hope to get at least four representatives from each of the district's 10 schools.

Dist. 97 could receive $4.7 million annually, or 10 percent of its Education Fund, if the latest version of the bill were passed.

West of Harlem, skepticism

"We're very skeptical," said River Forest District 90 Supt. Marlene Kamm. "Everyone knows that the [Illinois] Lottery was just a shell game. There's nothing to say this isn't a shell game, too."

Kamm said estimates show Dist. 90 would lose funding if HB 750 were passed, something one of the bill's authors, himself a River Forester, categorically denies.

"It's not possible for districts to lose money under the bill," said Ralph Martire, executive director of the nonprofit Center for Tax and Budget Accountability and a Chicago Sun-Times columnist. He says 96 percent of districts would benefit from the bill, while the remaining 4 percent would break even. "That's just how the bill works. We have run the numbers through ISBE [Illinois State Board of Education] and through their models, so we know we are correct when we say that," Martire said.

The bill calls for increasing personal income tax from 3 percent to 5 percent, raising taxes for businesses from 4.8 percent to 8 percent, and refunding local property tax bills between 20 percent and 25 percent. .

Martire said unlike measures proposed in the past in Illinois or those that have been effected elsewhere, HB 750 brings all districts up, rather than robbing from the rich to pay the poor.

"This is not Robin Hood like they did in Texas. That's bad," Martire said.

He conceded, though, that wealthier Illinoisans would bear a greater portion of the burden, even taking some of the burden away from businesses, which would get a $380 million tax break from the proposal. The top 40 percent of earners would pay more in combined income and property taxes, while the bottom 60 percent would benefit.

But that shift helps state funding in an ongoing way, Martire said. With poor and middle-class families shouldering the burden, state income shrinks when you correct for inflation because salaries for those populations actually shrink when you correct for inflation. Salaries in the 60th to 80th percentile increased 5 percent in the past 20 years, while those in the top 1 percent increased 93 percent, after correcting for inflation, he said.

That shifting burden could make taxpayers in Oak Park and River Forest less willing or able to later approve local tax increases if needed, thus negatively affecting schools.

"The community's not separate from the school district," said Cheryl Witham, chief financial officer at Oak Park and River Forest High School.

Officials at OPRF are divided on HB 750. "I guess we're in the middle," Witham said.

A former Minnesota resident, Witham remembers too well when Gov. Jesse "The Body" Ventura instituted a tax swap that pinned schools there to the mat with overbearing, micromanaging mandates, unneeded for high-performing districts such as OPRF.

"It becomes one-size-fits-all-ish," Witham said. "I like local control of school districts."

What everyone interviewed for this article agreed on was that school funding needs to be rethought and improved for property-poor districts.

"It shouldn't be that the only people who have access to adequate education in the state of Illinois are people who live in property-rich districts," Martire said.

ED-RED's Baiocchi said a measure to improve the situation shouldn't pit sides against one another, but bring people together to find common ground.

Burke concedes the possibility for future legislatures to reverse positives enacted if HB 750 were to be approved. But he thinks legislators have learned from past mistakes.

"The more realistic danger is to not do anything," Burke said.

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