More bang, less shift needed in education funding
Saturday, July 16, 2005 11:41 PM CDT
By the H&R Editorial Staff

Changing kindergarten through 12th grade education in Illinois is going to be a central issue in the 2006 campaign for the governor's office, and it's an often-discussed topic each year in Springfield.

A recent report titled "A Critical Analysis of Education Funding Reform," issued by the Illinois Policy Institute, should be required reading for legislators, educators and others interested in education. The report can be seen at the institute's Web site, www.illinoispolicyinstitute.org.

The institute, which calls itself a free market think tank, examined so-called "tax reforms" that portend to shift the tax burden from property taxes to income taxes. These plans, which were brought to the legislature during the last session in the form of House Bill 750, say they will raise the money available to education by $7.3 billion.

The institute's report makes these basic points:

The "shift" actually will result in an overall increase in taxes, and that will have an impact on the state's ability to retain current jobs and attract new jobs. Using a complicated model called the Illinois State Tax Analysis Program, the institute estimates that in the first year, the tax increases and the shift to an income tax will eliminate more than 142,000 jobs statewide. That job loss occurs because businesses and individuals will have to adjust their behaviors to meet the higher tax demand. The relative health of the national and state economy could mitigate, or add to, the overall impact of the tax increase.

There is no strong correlation between the amount of money spent on education and successful education. The District of Columbia school system is in the top five in terms of per pupil spending, but ranks near the bottom in terms of education performance. There is also no correlation between the percentage of education funded by the state and the success of a state's education program.

There is no guarantee the reduction in property taxes would be permanent. The reduction would take the form of an "abatement" to reduce property taxes, which could be taken away in subsequent years.

More important than the institute's criticism are the thoughts on how to reform education in the state without tax increases.

The simplest is to make sure Illinois taxpayers get more education bang for the buck. There are 37 states that spend a greater share of their tax dollars on instruction than Illinois. Illinois spends about 59.5 cents of every dollar on expenses related to instruction. The national average is 61.5 cents, and top performing school systems in Massachusetts (63.6 cents), Minnesota (63.6 cents) and New York (68.3 cents) spend even more on instruction.

Spending at just the national average on instruction would mean an additional $391 million to instruction, or $188 per student. A more dramatic improvement could be made by following what is called the "First Class Education" model, which requires school districts to spend 65 percent of their operating funds on instruction. Arizona, Michigan and Oklahoma have adopted this model. In Illinois, it would mean $437 more per student or nearly $1 billion more statewide.

The institute's report makes clear a position we've stated before. Illinois education does not have a revenue problem, it has a spending problem. Putting additional tax resources into education will not solve anything, but putting more of the money education already receives into classroom instruction will have an impact.

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The 65% Solution: Republican Assembly of Lake County Proposes Way To Put $900 Million Into the Classroom
Monday, May 30, 2005
By Cal Skinner

LAKE COUNTY - $906 million more money for Illinois schools? Without raising taxes?

That’s the amount Lake County’s Republican Assembly is suggesting could be reallocated from non-class room expenditures for classroom use.

That’s the amount that would be freed up if 65% of the operating budgets of public schools were spent in the classroom, instead of the 59.5% now spent there (average statewide percentage).

The idea has gained some prominence with a 2006 referendum proposal by GOP legislative leaders in Arizona and proposals advanced in Minnesota, Michigan, Pennsylvania and Louisiana, among others.

It is based on the current classroom allocation of 65% of operating money now being spent in the classrooms of New York, Maine, Tennessee and Utah.

It borrows from a business concept called “best practices.” One should study one’s competitors, according to the technique, in order to identify current benchmarks and emulate the best.

The Republican Assembly, considered a part of the conservative wing on the Republican Party, just released a booklet entitled, “The 65% Solution" that lays out the case for the concept.

“It’s a good idea because, first of all, educrats typically always want more money, but we know when we make a comparison of private education with public education that public education is always heavy at the top with bureaucracy,” Executive Director Jack Marin. “Always six figure salaries, always big pension benefits, always more for administration."

Martin continued, “What we are talking about is taking the resources the schools already have and putting they in the classroom.”

Where would the money come from? Administration, plant operation and maintenance, food service, transportation, student support (nurses, counselors), teacher training and curriculum and other non-classroom expenditures.

What would happen with the extra money? “Each school board would be empowered to determine how to allocate the additional classroom funds,” according to the proposal. “They would choose to raise teacher pay, reduce class sizes or add additional instructional opportunities. Districts below 65 cents (of the dollar) will need to increase by 2 pennies a year until the goal is reached,” with waivers possible for “legitimate reasons.”

Martin said that State Rep. Bob Churchill (R-Lake Villa) has signed on to sponsor enabling legislation next year.

The idea originated with Overstock.com’s Patrick Byrne. He formed a non-profit organization called First Class Education to promote it[www.firstclasseducation.org].

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