Distributed via Email: March 18, 2009

GOVERNOR UNVEILS 'PAINFUL' BUDGET; EDUCATION FARES BETTER THAN MOST

Governor Patrick Quinn, in his first state budget address, delivered a message Wednesday that asks all parties to "share in the pain" of the current budget and economic crisis. With a bold combination of proposed tax increases and rigid budget cuts, the governor has a plan to help the state crawl out of the $11 billion budget hole. Education, again, was made a priority as an increase in funding was proposed for both elementary and secondary education and higher education.

Governor Quinn recommends that K-12 education receive a funding increase for Fiscal Year 2010 of nearly $174 million over the current FY '09 level. He also proposes $1.5 billion in state school construction funds and State funds for school maintenance grants and pre-school building funding.

A much lower payment to the state pension systems was proposed, including the Teachers Retirement System, than is scheduled for FY '10. Though this would add to the unfunded liability of the pension systems, the governor indicated that forthcoming reforms to the systems would recover the funding in the long run.

FOLLOWS THE ISBE RECOMMENDATION

The governor generally followed the budget proposal of the Illinois State Board of Education (ISBE). He recommended that the foundation level in the General State Aid formula be increased by $130 per pupil (from $5,959 per pupil to $6,089 per pupil) and that the mandated categorical grants be fully funded. Other line items proposed for an increase over FY '09 levels are early childhood education ($12.5 million) and Bi-Lingual Education ($8 million). A new line item for a Longitudinal Data System would also see funding of $2 million.

Many smaller budget line items that were funded in FY '09 were eliminated in the proposed FY '10 budget, including:

FEDERAL STIMULUS FUNDS USED

About $335 million in federal stimulus funds is earmarked in FY '10 for school district Title I programs for disadvantaged students. Roughly $262 million in these federal funds is allocated for special education through the federal Individual with Disabilities Education Act (IDEA). In other ISBE line items, the state was able to use less general revenue fund monies and "fill in" that shortfall with additional federal recovery funds. About $1.7 billion in federal stimulus money is included in the governor's proposed budget for the ISBE. Some line items receiving the funds include:

INFRASTRUCTURE PROGRAM

The governor proposed a $26 billion statewide infrastructure program to build roads, bridges, and schools. For K-12 education, the program would provide $1.5 billion in state funds to build new schools. With the local match, this would provide $3 billion in school construction funds. $100 million would be available (with a required dollar-for-dollar local match) for school maintenance grants for smaller repair and maintenance projects at schools. And $25 million would be provided for renovations and additions for school districts and not-for-profit organizations to support pre-school programs.

The infrastructure program would be funded with new state revenue sources, including:

• An increase in driver's license fees and vehicle registration fees
• Current motor fuel taxes and vehicle registrations
• An increase in title fees to pay for transit
• A 10% share of the personal income tax increase and the corporate income tax increase

NEW REVENUE SOURCES

Governor Quinn proposed to increase the state individual income tax rate from 3% to 4.5% (raising approximately $2.8 billion). As well, the corporate income tax rate would increase from 4.8% to 7.2% (raising $350 million). By "closing loopholes" in the corporate income tax base, the state would see an increase in revenues of about $173 million. These changes would include:

• Correcting the tax code to include taxes from the "Outer Continental Shelf" and the U.S. Territories
• "Decoupling" from certain federal tax incentives
• Repealing the Research and Development tax credit
• Limiting corporate tax credits to 50% of their tax owed

According to the governor, another $94 million in revenues would come to the state by expanding the sales tax to cover prewritten software that is acquired via a licensing agreement and by limiting an exemption in the sales tax regarding graphic arts firms.

"TAX EQUITY"

In order to spare lower income households from some of the tax increases, the governor proposed to increase the state's standard personal exemption from the current $2,000 up to $6,000. This will ensure that the overall income tax burden will decrease for many lower income taxpayers. Also, a "sales tax holiday" would be imposed for 10 days in August whereby shoppers would be able to purchase clothing, footwear, and school supplies without paying the state sales tax.

BUDGET CUTS AND REFORMS

The governor proposed to require state employees to take four furlough days, without pay, next year to save the budget about $36 million. State employees would also have to pay more in healthcare contributions next year. Long term, the governor proposed to significantly change the State Employee Retirement System to require any new hires to pay higher retirement contributions, work more years before being eligible for retirement, and receive lower cost of living adjustments. No such reforms were proposed for any other state retirement systems.

CALL TO ACTION ON PROPERTY TAX PROPOSALS

SB 2126 (Viverito, D-Burbank) would create a CPI (Consumer Price Index) "floor" for calculating the extension limitation under the Property Tax Extension Limitation Law (PTELL). It provides that the extension limitation under PTELL may be no less than 2%, even if the CPI dips well below this level as it has currently. Due to the huge volume of legislation that committees had to hear last week, this Alliance initiative was held over (thanks to Committee Chairman Viverito) for the Senate Revenue Committee to consider this week.

Please contact the Senate Revenue Committee members and ask for their yes vote so that the bill can move to the full Senate for consideration. It is especially important to support this bill because schools are facing ever skyrocketing costs and a growth factor of less than 1%. CPI for next year's extension limitation will only be .1% which will severely limit the ability of school leaders to meet the costs of providing public education.

Please call and ask for a YES VOTE on SB 2126.

NEW REQUIREMENTS PROPOSED FOR SCHOOLS

In the midst of the largest state budget deficit in Illinois history, and while the governor has proposed a "share the pain" budget request to keep state spending under control, lawmakers have stilled introduced dozens of bills that would place new requirements on school districts. Legislators need to hear from school board members, superintendents, business officials and principals with one clear message – this is not the year to add new unfunded mandates on school districts.

The General Assembly should focus on the economy and the state budget this spring. New programs and additions to current school programs should not be approved while the state is delinquent in paying its old bills and cannot make school grant payments and reimbursement payments on time. When talking to your legislators, please urge a "no" vote on legislation that increases the school district's burden on finances, resources, and time.

BILLS REQUIRING NEW ACTION BY SCHOOL DISTRICTS

The following is a list of proposed bills that have received committee approval this spring and are moving through the legislative process. Most have been strongly opposed by the Alliance. Some of the bills, however, have been amended to address Alliance concerns and Alliance opposition to the bill has been removed. In full disclosure, in this list the Alliance has attempted to include all bills that will require some new action on behalf of the local school district.

SB 261 (Noland, D-Elgin) requires that if an Education Support Person does not use the full amount of annual leave allowed, the unused amount shall be allowed to accumulate to a minimum available leave of 240 (instead of 180) days at full pay.

SB 1557 (Delgado, D-Chicago) requires the addition to history courses a unit of instruction studying the forceful removal and illegal deportation Mexican-American U.S. citizens.

SB 1559 (Koehler, D-Pekin) requires a school board to only purchase or lease vehicles assembled in the United States that are used for driver's education courses.

SB 1665 (Jacobs, D-Moline) requires the Comprehensive Health Education Program to include information about cancer.

SB 1675 (Murphy, R-Palatine) requires all 7^th graders and all high school students enrolled in U.S. History to view the Congressional Medal of Honor film.

SB 1769 (Steans, D-Chicago) adds new requirements regarding a school district's procedures for applying pesticides to outdoor school property.

SB 2270 (Cronin, R-Elmhurst) requires school districts to annually submit to the ISBE an itemized salary compensation report for district employees.

HB 272 (Franks, D-Woodstock) requires random drug testing for high school athletes and requires high school coaches to complete an educational program on the prevention of abuse of performance-enhancing substances and to complete a proficiency exam.

HB 281 (Bellock, R-Westmont) and SB 152 (Garrett, Lake Forest) require school boards to adopt a policy on the management of students with life-threatening food allergies.

HB 380 (Nekritz, D-Northbrook) and SB 153 (Garrett) require each school board employing an employee who is on the IMRF Board of Trustees to make available to the trustee at least 20 days of paid leave per year to attend meetings of the IMRF board.

HB 628 (Osterman, D-Chicago) requires a school district to provide access to school property to a private evaluator or expert retained by a parent of a student with an IEP.

HB 1035 (Flider, D-Mt. Zion) requires school districts to provide instruction on disability history, people with disabilities and the disability rights movement.

HB 1332 (Boland, D-Moline) requires U.S. flags flown on the property of state government or the property of units of local government to be manufactured in the United States.

HB 2291 (Miller, D-Dolton) requires each school board to assess annually the physical fitness levels of all students in grades 5, 7, and 9.

HB 2386 (Hernandez, D-Cicero) requires, in order to receive a high school diploma, each student entering the 9^th grade in 2010-11 and thereafter must complete at least 40 hours of community service.

HB 2508 (Pihos, R-Glen Ellyn) requires a unit of instruction on Pontian-Greek Genocide.

HB 2535 (Poe, R-Springfield) requires the use of a 5% bio-diesel blend in school buses (instead of the current 2% blend).

HB 4318 (Vershoore, D-Rock Island) requires a school board to ensure that high school students participating in sports have a hernia check performed before being allowed to participate.

*The legislative report is written and edited by the lobbyists of the Illinois Association of School Boards to provide information to the members of the organizations that comprise the Statewide School Management Alliance.

General Assembly Bill Text/Status

Alliance Legislative Reports are Cosponsored by IASB and:
[ IPA ] [ IASA ] [ IASBO ]

Return to ALR Menu