Wednesday, May 24, 2017

State budget bills sent to the House;
School officials urged to contact legislators about property tax freeze

Deputy Executive Director Ben Schwarm
IASB Deputy Executive Director Ben Schwarm breaks down the budget passed by Senate Democrats and urges board members and administrators to contact their legislators about the impacts of a property tax freeze.
The Illinois Senate Democrats, on Tuesday, frustrated by the lack of a budget compromise between the governor and the legislative leaders, ventured out alone and approved a comprehensive statewide budget for Fiscal Year 2018. Included in the 650-page omnibus budget proposed in SB 6 are full-year appropriations for K-12 education. The bill passed on a vote of 33-23-2, with no Republicans voting in favor of the measure.

For education, the bill would provide a $286 million increase for General State Aid that is appropriated for “Evidence-Based Funding.” There is no definition in SB 6 of exactly what that means, but it can be assumed it is based on SB 1, which the Senate passed last week. More information on the Senate’s action from last week is posted here.

SB 6 includes a $36 million increase in bilingual education and a $35 million increase in early childhood education. The bill would also appropriate money to Chicago Public Schools for  teacher pension payments.

Accompanying the appropriations bill was SB 9, which would provide additional revenues to the state to cover the costs of the appropriations. SB 9 would increase the individual income tax rate from 3.75 percent to 4.95 percent and the corporate income tax rate from 5.25 percent to 7 percent— retroactive to Jan. 1, 2017. The sales tax base would also be broadened to cover certain services, including: storage, laundry, exterminations, security services, tattoos and piercings, cable, satellite, and digital streaming services. Along with a few other changes to the tax codes, the result is estimated to be an increase of $5.4 billion to state coffers.

As it currently stands, Governor Bruce Rauner is not on board with this proposal. In debate yesterday, Senate Republicans indicated that the final two sticking points are agreements on a property tax freeze for school districts and other units of local governments, and Workers’ Compensation Act reform. Last week, the Senate defeated a bill (SB 478) that would have frozen property tax extensions for two years. The governor is calling for a permanent property tax freeze. Alliance members are urged to contact their legislators and inform them of the adverse effects a property tax freeze would have on their school districts.

As for House Speaker Michael Madigan, it is anyone’s guess on how he will deal with the Senate budget plans. Generally, he could ignore or dispose of the Senate bills; approve the Senate bills and send them to the governor; or craft his own budget plan and send it over to the Senate.

The situation is obviously very fluid at this point. The General Assembly is scheduled to adjourn for the spring on May 31st. They will be in session most days until then, likely meeting at least a day or two over the holiday weekend.