Ill. Governor's Budget Plan Sparks Legislative 'War'

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Gov. Jim Edgar of Illinois has set off a high-profile, $280 million funding battle that has pitted education and other social programs against the state's local governments.

The Governor, who pledged during his election campaign not to raise taxes during his first term, instead announced this month that he will seek to extend a temporary income-tax surcharge and redirect half of its proceeds from municipal and county governments to the state's general fund.

That recommendation has set off a bitter debate that is likely to continue throughout this year's legislative session, observers said.

"The war of press releases has started and the war of legislators has started,'' said Pete Weber, the assistant executive director of the Illinois Association of School Boards.

Mr. Edgar's $29.2 billion budget plan would provide a $110 million increase for elementary and secondary education--more than schools have gotten in recent lean years, although well below the level sought by the state board of education.

The funding, which is contingent on approval of the tax-surcharge shift, would include $68 million in general state aid, $20 million for preschool education, $10 million for teacher-retirement expenses, and $10 million in district-consolidation incentives.

The proposed budget increase would also boost funding for Project Success, which funds social services in schools, and a student-apprenticeship program.

Proceeds from the income-tax surcharge, enacted in 1989, currently are split evenly between school districts and local governments. Mr. Edgar's proposal would preserve funding for the schools, while recouping the municipalities' half for the state.

In his budget address, the Republican Governor also called for statewide caps on local taxes.

'Trying To Hang On'

But while state education groups have urged local educators to fight against the tax-cap plan, they have focused the bulk of their attention on building support for the Governor's school-funding increases.

School officials also quickly lined up behind the Governor's position that the income-tax surcharge was not intended to be a permanent source of local funds.

The proposed increase, five times more than schools received this year, "will certainly be a step forward in recovering from several years of stagnant state financial support,'' said Ronald E. Everett, the executive director of the Illinois Association of School Business Officials.

"If this shift does not occur, we're talking about cutting education budgets this year,'' said Mr. Weber of the school boards group. "Education and social programs are all so desperately underfunded that this is where the priority should be.''

Lobbyists for local governments, while not picking a fight with education groups, have been struggling to maintain the income-tax funds.

"We understand schools have got their problems, and we've got ours,'' said Tom Fitzsimmons, the executive director of the Illinois Municipal League. "Schools are doing the same thing we are--trying to hang on.''

Legislative allies of city and county leaders last week introduced a bill that would allow schools to raise local funds through an income-tax surcharge. Backers described the proposal as an effort both to decrease property-tax reliance and to raise local tax capacity in hopes of freeing up the tax-surcharge funds for local governments.

Local officials have argued that without the surcharge funds, they will be forced to cut services or raise property taxes. If that is so, it will be in spite of repeated urgings by state officials to use the temporary surcharge funds for one-time projects, rather than for regular programs.

While most localities have used the money for special projects, the city of Chicago in particular has built it into the basic budget. Mayor Richard M. Daley said the city has already included $40 million in surcharge receipts into its 1993 budget.

Kids Over Concrete

While school officials, local governments, and legislators slug it out over the surcharge funding, many observers fault Mr. Edgar, who is up for re-election next year, for starting the fight in the first place.

"He wants to run again, so he's not raising taxes, just taking it from other places to suit his use,'' said Mr. Fitzsimmons.

Mr. Edgar has responded by noting that only a few local leaders even supported the income-tax surcharge before it was approved by the legislature, and adding that no one should have come to rely on it.

"To me, there is no choice,'' the Governor said in his speech. "Especially when this special revenue-sharing program has showered millions of dollars on local governments without distinguishing between those that have especially pressing problems and those that really do not.''

"When the choice is between kids and concrete,'' the Governor said, "the kids must win.''

Vol. 12, Issue 25

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