Illinois
Gov. Rod Blagojevich used his March 7 budget address to unveil a proposal to overhaul his state鈥檚 tax system, a move that he predicts would pour billions of dollars in new revenue into Illinois schools.
The Democratic governor, speaking to a joint session of lawmakers, called for replacing Illinois鈥� corporate income tax鈥攚hich he described as 鈥渓oophole-riddled鈥濃�攚ith a gross-receipts tax, or a tax on goods and services provided.
That change would be fairer to middle-income and working-class families, and would relieve local governments and school districts from relying on property taxes, argued Gov. Blagojevich, who was re-elected to a second term in November. The governor said Illinois now has 鈥渙ne of the most regressive tax systems in the nation.鈥�
Such a tax overhaul, he said, would 鈥渇inally bring an end to the savage inequality in how we fund our schools.鈥�
The proposed tax shift would provide schools with an additional $10 billion over the next four years, the governor predicts. Overall, the K-12 general-fund budget would increase by 23 percent, to $8 billion in fiscal 2008, which begins July 1, from $6.5 billion in fiscal 2007.
For years, education advocates and some legislators have decried Illinois鈥� system of paying for schools as being too reliant on property taxes, a structure that they say harms tax-poor school districts. Some lawmakers have proposed reducing property taxes and increasing state income taxes, but the governor has rejected that approach.
Clare Fauke, a spokeswoman for A+ Illinois, which seeks to improve school funding and school quality, said her organization supports the governor鈥檚 plan. 鈥淲e think it鈥檚 a strong proposal,鈥� Ms. Fauke said. 鈥淚t鈥檚 a good starting point.鈥�
The governor also proposes leasing Illinois鈥� state-run lottery to help close a gap in the state鈥檚 pension fund, which supports teachers and other state employees鈥� retirement and has an unfunded liability of $41 billion.
Read a complete transcript of , posted by Illinois鈥� . Also, and of the governor鈥檚 speech is available.
