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Bills in Illinois Shift the Focus To Earmarking

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Illinois lawmakers, frustrated by their inability in recent years to raise state taxes for education, are trying instead this year to ensure that schools get a bigger share of existing revenues.

The legislature is currently considering almost a dozen bills that would permanently earmark a specific percentage of either existing tax collections or new revenues for education.

Several of the bills resemble California's Proposition 98, a landmark constitutional amendment passed by voters last fall that earmarks 40 percent of that state's budget expenditures for public schools and community colleges. The Illinois proposals, however, are in the form of statutes and would not need voter approval.

One of the bills, a measure sponsored by Democrats called Fund Education First, has been cleared by the Senate education committee for a vote by the full chamber. It would require that 50 percent of all revenue growth recorded by the state each year be earmarked for education.

Sponsors say the bill would provide schools and colleges with $100 million more than the $345-million increase in overall education spending proposed by Gov. James R. Thompson. Precollegiate education would get a $214-million increase under his plan.

A Republican-sponsored measure, called Priority One, would earmark for education 63 percent of net revenues from the state's income tax. Elementary and secondary education would receive two-thirds of the funds and higher education the remaining third.

Under existing state law, education receives all lottery profits, one-quarter of the state's sales-tax revenues, and a fraction of its cigarette taxes. In addition, education typically receives about 59 percent of the state's net income-tax proceeds, one lawmaker said.

Priority One's sponsors say it would generate $171 million more for education next year than the Governor's proposal.

The bill was rejected on a partisan vote by the House education committee, and proponents failed to gather enough votes in the full House to have the committee's action reconsidered. Supporters, however, said it would be reintroduced as an amendment to another bill.

Legislators say the earmarking proposals have arisen in response to public pressure. The state's national ranking in per-capita spending for education has dropped from 7th to 44th over the past decade.

According to Representative Gene L. Hoffman, a sponsor of the Priority One measure, the legislation is designed "to deal with the criticism that we mouth education is a top priority but we don't fund it like it is."

A school-reform package adopted in 1985 has never been fully funded, and some 20 percent of the state's school districts have come under an increased level of state monitoring due to their precarious financial conditions.

Most state education groups, many lawmakers, and Governor Thompson have pressed for several years for an increase in the income-tax rate, which currently is among the lowest in the nation. Their efforts, however, have been rebuffed by key lawmakers, who say they are more concerned about the accountability of the public schools, particularly those in Chicago.

The politically influential Illinois Farm Bureau is also among the groups lobbying for an income-tax increase, which it wants partly to help reduce property-tax rates. But prospects for such an increase remain uncertain, and the legislature is not expected to pass a budget for the new fiscal year until the end of June.

The legislature is also expected to consider a perennial proposal to rework the school-aid formula to provide more money to suburban and downstate districts.

An unrelated measure that would use increased state aid to schools to fund a voucher-type program is pending in the full House.

The measure would allow stu4dents to apply the voucher--estimated at $51 next year--to tuition costs at any of the state's public or private schools. Opponents complain that the measure was not assigned to the House education committee, where it would have faced certain defeat, and say that its prospects for passage in the full House are dim.

The legislature is also working on emergency legislation to address a recent state court ruling on municipal and school-district bonds that could prevent some districts from meeting their payroll this month.

A state appellate court ruled that despite market pressure for a higher rate of return, state law forbids districts and other governmental entities from offering more than 7 percent interest on their bonds.

According to state officials, some districts face the prospect of running out of money this month if they cannot borrow against anticipated tax revenues, as is their custom at this time of year.

The Governor and the state board of education have agreed to accelerate aid payments to school districts to help alleviate the crisis, spokesmen said.

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