Despite population losses and high unemployment, the Midwest remains a wealthy region that could afford to pay more for education than it does, according to a University of Illinois researcher working under the auspices of the National Institute of Education.
Terry Geske, a professor of educational administration at the university’s Champaign-Urbana campus, found in his study of 12 Great Lakes and Plains states that the region as a whole is still wealthier than the national average, but puts forth a lower-than-average tax effort for public services, including education. Illinois, for example, underuses its personal income-tax base by some 25 percent relative to other states, he found.
Mr. Geske said, however, that he found some differences between the five Great Lakes states and the seven Plains states whose prospects for school funding he examined. The Plains states, which are less reliant on “smokestack industries” and have experienced less out-migration than the five states abutting the Great Lakes, are somewhat more stable financially, he said.
Economic, Demographic Decline
Although the region is rich in soil and water, and has a strong industrial base and skilled workforce, he said, it is trapped in a steady economic and demographic decline. The Great Lakes region in particular has historically been slower than the rest of the country to recover from economic downturns, and its per-capita personal income has dropped from 105 percent to 102 percent of the national average in the past 15 years. Thus, he believes, a nationwide recovery would not necessarily work to the benefit of public schools in the region.
Midwestern states, owing to declining income- and sales-tax collections, have again become more dependent on property taxes to finance schools, he noted, after a decade of steady growth in the state contribution. “The shift from local to state and back has been radical,” he said, adding that limits on property taxes will prevent districts from picking up all the slack left by state and federal cuts.
Furthermore, he said, the “New Federalism” probably will exacerbate the weak financial condition of Midwestern states, which now receive only 74 cents in federal revenue for every dollar sent to Washington.
“The short-range revenue prospects for schools in the Midwest look bleak and the long-range prospects are very difficult to determine,” Mr. Geske said."If a prediction were to be made based on trends and occurrences over the past decade, the prediction would have to be for a continued slowdown in school revenues in the coming years.”
Even with the tax increases recently enacted or currently contemplated in all five Great Lakes states, Mr. Geske said, he does not expect the overall low tax effort to increase much. “The political culture and norms tend to keep it within certain parameters,” he said.
The report, which is still in “working draft” form, probably will be published as a series of articles, Mr. Geske said. nie, because of budget constraints and other factors, has abandoned plans to publish his and other regional studies, he added.--pc
