Rauner to sign new school funding formula: Another tax hike, though?

Governor Rauner plans to sign into law Thursday a new formula for computing state aid to local schools across Illinois. 

None of the state's top officials, though, say where the money will come from.

The new school funding formula Bruce Rauner says he will sign promises $7-1/2 billion in new money to Illinois school districts over the next few years. That’s on top of $14.6 billion in unpaid current bills and billions more in long-term pension obligations. Many foresee another round of tax increases.

“It makes me want to puke. They tax us all to hell and back,” said electrician Terry Quinn.

Instead of raising taxes, the state could cut existing programs to find the money. 

“We identified reforms to get $7 billion less in spending,” said Ted Dabrowski of the Illinois Policy Institute. “We balanced the budget without tax hikes. And we believe the state can do that.”

Very few state lawmakers -- Republicans or Democrats -- support the policy institute's plan. It would balance the budget by cutting billions of dollars from local school districts and by kicking half-a-million Illinoisans off Medicaid. 

“Well, in order to make our government work, we have to pay for the government. Right?” said taxpayer Bob Sullivan.

“We have the 5th largest population and 5th largest economy, couldn't call us high tax,” said Ralph Martire.

Veteran bean counter Ralph Martire says Illinois needs about $2.8 billion more in annual revenue to truly balance its budget. He says expanding the sales tax to cover the same services that Wisconsin now taxes would bring in about $2 billion a year. Raising the income tax from the current 4.95% to 5.2% would bring in more than $800 million, completing the job. 

Few lawmakers like that option, having just raised the income tax last month.

Whether by cutting or taxing, it will be hard to balance Illinois’ budget. The governor and lawmakers have decided once again to ignore all that, instead adding billions of dollars in new school spending.

Gov. Rauner visited schools in three downstate communities Wednesday, praising the new school funding bill. He plans to sign it Thursday in Chicago.