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 Peg Mannion
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From: Monday, October 5, 2015 8:46 AM -0500
Subject:Be wary; education cuts never heal
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5/22/15


Want to know how legislators get through the gridlock of state budget woes and policy reform proposals? Visit a local meat factory and watch sausage being made.  Yes, the legislative process is a grinding, messy, mysterious and an unbecoming process.  

Our elected leaders are in closed-door meetings debating, negotiating, compromising and again figuring out how to patch a multi-billion dollar budget hole for next fiscal year.

For public education interests, through the years, our elected officials have been "kicking the can down the road" by diverting revenue that should have funded the normal cost of retirement benefits to fund other interests and projects.  The consequence of decades of mismanagement has resulted in many school districts finding themselves in a position where they must borrow annually to meet expenses.

Now let's hope the legislative wrangling and backroom deals being negotiated with the governor don’t result in larger class sizes, fewer teachers, reduced programming and less support for struggling students.

Just as teachers assist their students in thinking divergently and differently about a challenge or problem, we should challenge our governor and lawmakers to do so as well. While both avoidance of the problem and initiating severe cuts are typical and predictable reactions by our lawmakers, why not think differently and divergently?  

In reflecting on our state’s taxing history, did Illinois, for decades, have an imbalance between revenue growth and services cost growth?  Was our tax policy, which was heavy on property taxes but light on business, service and income taxes, really suitable for a modern economy?  Review other state taxing structures that are thriving economically and you will observe a balance of reductions and revenue enhancements.  Minnesota, for example, is enjoying a billion dollar surplus due to its disciplined, sustained investment in education and key social services.  Contrast this with the chaos occurring in Kansas and North Carolina. Due to poorly advised tax cuts in recent years, the governors of both states are scrambling to contend with significant cuts to education, health care, social services and public safety.

While our lawmakers scheme a property tax freeze, pension cost shift to local school districts and reduced General State Aid to school districts, it's paramount that they be creative and divergent in their thinking.  Ralph Martire, executive director of the Chicago-based Center for Tax and Budget Accountability, outlines a path for fair revenue enhancements. They include:
  • Consider marginally increasing the personal income tax rate from the current 3.75 to 4.25.  This would be similar to the rates in other states.
  • Expand the sales tax to include consumer services. This would be fair and consistent across sectors.
  • Reamortize the pension debt from 30 to 43 years.  This would provide immediate relief.
  • Begin taxing retirement income on a graduated scale. Again, this would be consistent with other states.
As any smart businessperson knows, arriving at a balanced budget through only cuts will harm your enterprise.  Again, a growing and thriving modern economy will need a balance of restructuring and investing.  Let's hope our lawmakers realize this as they continue to grind out new legislation and a balanced budget.