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Finance Reform, Thought Doomed, Gets Airing in Ill.

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School-finance reform, tagged as an impossible dream for Illinois lawmakers this year, is getting an extended run in the Republican-dominated legislature.

The idea seemed destined for an early curtain when it was first proposed by Gov. Jim Edgar last month. But the same election-year pressures that made a $1.9 billion tax increase hard to swallow have also made it difficult for legislators to dismiss altogether the notion of reworking the way the state distributes money for education.

Miffed that the Republican governor had put them in the uncomfortable position of rejecting a more equitable school-funding system, GOP leaders of the House and Senate have floated a compromise version. And though in the long run it may not pass and may not satisfy the backers of finance reform, lawmakers will at least be able to tell voters they tried.

"This plan doesn't do good that helps one part of the state at the expense of another," said Lee A. Daniels, the House speaker, who drafted a less expensive and less expansive school-finance bill. "Every school district comes out a winner."

Such talk is much more palatable than Mr. Edgar's proposal, which grew from the recommendations of a task force.

The Illinois school-finance system allows some of the biggest disparities of any state in the nation. Because of variations in local property wealth and the system's reliance on property taxes, per-pupil funding in the state ranges from about $3,000 to $15,000.

Under the governor's plan, which would require amending the state constitution, the state would increase taxes by $1.9 billion per year. Of that, $1.5 billion would simply be a shift in revenue from localities to the state, via an increase in the state income tax to offset $1.5 billion in property-tax relief.

The remaining $400 million would be new money, pumped into the finance system in an effort to raise per-pupil funding in all districts to at least $4,225. (See Education Week, April 3, 1996.)

The shift away from property taxes would hamper school spending in the affluent Chicago suburbs that are a Republican stronghold. Mr. Daniels' plan, however, attempts to keep the issue alive without sending suburban constituents into a panic.

No New Taxes

Speaker Daniels' bill carries a $500 million price tag and requires no tax increase. It would set aside grants of about $250 per pupil that districts could spend on school technology and classroom programs or use to replace local property taxes. The bill also would require a high school exit exam and extra testing of 3rd and 6th graders.

It is a far cry from Mr. Edgar's call for a constitutional amendment that would require the state to pay at least half the cost of local schools. The state now picks up almost one-third of the total cost.

Not surprisingly, lawmakers have become more interested in school finance now that Mr. Daniels' "Quality First" plan is on the table. The bill easily passed the House education committee, and won approval in the full House on a 69-46 vote.

James "Pate" Philip, the Senate president, said last week that the bill might become the basis for a compromise with Mr. Edgar. He added, however, that leaders in the Senate favor a less expensive version of the bill than even Mr. Daniels proposed.

Before he ever introduced the finance plan, Gov. Edgar had requested $220 million in new funding for schools.

Mr. Daniels' plan has run into opposition from a variety of state interest groups, which claim that paying for the education grants would force lawmakers to make substantial cuts in other state programs. Officials in the governor's office also have some reservations about the plan, arguing that it does nothing to increase equity among the state's school districts.

Observers, meanwhile, think all of the fuss may be for naught. The legislature is scheduled to adjourn May 22. Between now and then lawmakers must take final action on the state budget, which leaves little time for give-and-take on a school-finance bill.

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