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JOLIET — A proposal to improve school funding by revamping the state's tax structure drew a handful of outspoken critics to a legislative hearing on Wednesday.
While several educators, administrators and citizens testified in support of amendments to House Bill 750, the Senate Education Committee also heard from some taxpayers who oppose the measure.
The bill seeks to reduce education's reliance on property taxes by increasing state income taxes on businesses and wealthier individuals and by broadening sales taxes to include consumer services. If approved, Illinois would generate an additional $5 billion in revenue, of which $1.8 billion would go to schools and $2.5 billion would be used to abate local property taxes.
Supporters urged legislators to tackle the decades-old problem of insufficient school funding.
"Schools need and deserve better state support," said James Clark of Shorewood, retired superintendent of Joliet Township High School, during a hearing in Joliet Central's Little Theater.
But the third of at least six hearings on the bill attracted opponents to the public stage for the first time, with critics calling the proposal a massive tax increase disguised as education funding reform.
"This will dramatically damage the Illinois economy," said Bruno Behrend of River Forest, representing the anti-tax coalition Freedom Works. "It's money for the education bureaucracy, not education."
Other opponents said the state erred by allowing teachers, administrators and other school employees to collect generous pensions after retiring at a fairly young age.
"Diverting these funds from our children's instruction deeply affected the quality of education our children received and contributed to the deficits many schools are experiencing," said Robert Shelstrom of Palos Park.
Still, supporters argued that schools are way beyond belt-tightening. A Troy School District teacher ripped up pieces of paper symbolizing art, music, athletics and other programs the district will have to eliminate if a November referendum fails. A Kankakee school official said her district is so deeply in debt that it may soon cease to exist. And Morris school officials say their already-dire deficit problems are about to worsen because Midwest Generation, the district's largest taxpayer, is shutting down the Collins electrical-generating station.
"If we continue to fund education on the basis of property taxes, we will be bankrupt real soon," said Michael Wright, superintendent of the Morris Grade School District.
Both sides agree that the bill needs more study to determine the economic effects of the sweeping changes proposed.
"House Bill 750 is comprehensive. ... It is not perfect," said state Sen. Miguel del Valle, D-Chicago, Education Committee chairman.
The bill's creators say increasing corporate income taxes to 8 percent from 5 percent would be offset by the reduction in property taxes paid by businesses. The changes would improve fairness and equity in taxation and address the state's structural deficit, or perennial excess of expenditures over revenues.
"This is an important modernization of our economy," said Ralph Martire, executive director of the Center for Tax and Budget Accountability.
Still, skeptics believe the net effect on businesses would be detrimental. Eliminating a tax exemption on machinery and equipment, for example, would make Illinois less attractive to companies considering relocating or expanding operations and could drive corporate investors to other states.
"I don't think it would be neutral to business," said John Greuling, president and chief executive of the Joliet-Will County Center for Economic Development.
Proponents countered that Illinois schools have suffered for too long from tax loopholes that benefit corporations. Pat McGuire, a Joliet Township High School Board member, said that because of abatements and tax-increment financing districts, it will be years before JTHS realizes substantial revenue from the Dollar Tree distribution center, the Deer Run Industrial Park at CenterPoint's intermodal freight facility in Elwood, and other major developments in Will County.
"Even assuming that all of these lucrative properties eventually pay their full share of property taxes, I am haunted by what we are to tell our students and their families who are now suffering diminished educational opportunities," McGuire said.
"Do we tell the freshman in a class of 32 algebra students that he entered high school in the wrong decade? Do we tell the girl new to our country who is in a basic English-as-a-second-language class of 35 students to come back in 23 years when the (tax-increment financing districts) expire?"
Legislators will continue collecting public input on the proposed bill, which proponents hope the General Assembly will consider during next year's legislative session.
Reporter Ted Slowik can be reached at (815) 729-6053 or via e-mail at email@example.com.