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Edgar Calls Special Legislative Session To Consider

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Property-Tax Limits in Ill. Gov. Jim Edgar of Illinois last week announced that he was calling the legislature into a special session to consider limits on property-tax increases.

In his State of the State Address, Mr. Edgar said he would ask the legislature to approve by the end of March a proposal to limit property-tax increases to 5 percent or the rate of inflation, whichever is less, beginning this year.

"Our homeowners and our businesses are overburdened with skyrocketing property taxes," Mr. Edgar said, adding that quick action by the legislature to limit the taxes beginning this year is "the only protection our homeowners will have" from receiving high tax bills this summer.

The Governor said the property-tax limit he has proposed "doesn't hamstring our educators and other local officials," but provides "true property-tax relief for our homeowners who have been socked with double-digit increases in their local tax bills year after year."

Mr. Edgar also said he would veto any bill that pressures local government units to increase property taxes or allows property taxes to be increased without a referendum.

The Governor denied that his proposals were a "ploy" to gather support for extension of a 20 percent income-tax surcharge that currently provides schools more than $350 million a year. He did say, however, that he believes the surcharge should not be allowed to expire this year.

Mr. Edgar said early-childhood education should be a top priority for the state's limited resources, and pledged to devote additional re4sources to child and maternal health-care programs.

Noting that "a child will not learn if he or she is unhealthy or beset by family problems at home," the Governor also proposed establishing pilot programs in which a coordinator in every school marshals social services to ensure that the non-educational needs of children are met.

He also called for a system to measure the educational outcomes of Illinois schools.

The Governor said he had directed Lieut. Gov. Bob Kustra to monitor Chicago school reforms and to assure that there is coordination between the state boards dealing with K-12 education, higher education, and community colleges.--ps

MICHIGAN

Engler Urges Deep Cuts In Property-Tax Levels

Seeking to lure businesses and jobs into his economically troubled state, Gov. John Engler of Michigan last week called for a 20 percent across-the-board cut in property taxes for the schools.

"I believe this tax cut is desperately needed to stimulate our economy and to restore confidence in state government," the Governor said in his State of the State Address.

"Simply put, without this tax cut, Michigan will lose more jobs," Mr. Engler said. "The very real fact is that Michigan will never have a competitive edge as long as our taxes are higher than those in our neighbor states."

Arguing that Michigan's govern8ment has grown "relentlessly" while its population has not grown at all, Mr. Engler urged "broad, permanent, and structural" cuts in spending.

Mr. Engler did not specify in his speech how he would make up the revenue lost by schools as a result of the tax cut for residential- and business-property owners. But a spokesman for the Governor promised that the state would reimburse school districts dollar for dollar.

In the first year, the spokesman said, the state would be able to provide additional funds to local districts as the result of a $123-million decrease in the cost of a "homestead" property-tax-credit program. Once property taxes are lower, he explained, fewer residential-property owners will qualify for the homestead credits, which are given to households that pay more than 3.5 percent of their income in property taxes.

In the second year of the tax cut, the state will have to pay $400 million to districts. But that payment would be offset by budget cuts, revenues from increased economic activity, and normal annual growth in revenue of about 3 percent, the spokesman said.

Two packages of bills introduced last week by Republican members of the House and Senate would provide for tax and spending cuts as called for by Mr. Engler, the spokesman said.

Mr. Engler also used his speech to reiterate his commitment to the educational goals of parental choice, competition, and fiscal equity, and said he would present the details of his educational strategy to the legislature in an address this spring. (See Education Week, Feb. 13, 1991.)--ps

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