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School Board News Bulletin
March, 2004

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Blagojevich urges closing tax loopholes to fund schools

Near-record tax propositions land on March ballots

Bill would cap property assessments statewide

Bush education budget comes up short: NSBA

Houlihan urges school funding overhaul

File 2004 economic interest statements

Those Who Excel Awards to be presented April 17

Examine the Impact of Court Decisions on School Diversity Policies

THE NATIONAL SCENE

Utah House rebukes NCLB over unfunded mandates

Study shows shortcomings of proposals on Head Start

NEWS HEADLINES

NEWS FROM IASB

IASB leaders undertake 'mission' of learning

National workshop focuses on real work of boards

WORKSHOPS & MEETINGS

IASA conference to offer academy credit courses

Learn to reduce diesel fumes from buses in free workshops

FEDERAL UPDATE

ISBE warns Chicago schools on special ed segregation

Illinois FRN delegates lobby Congress on schools' behalf

Blagojevich urges closing tax loopholes to fund schools
Budget would provide $396 million in new funds, $213 million less than ISBE has proposed

Gov. Rod Blagojevich wants to spend $396 million more on schools next fiscal year, with most of the new money coming from additional taxation of business. That is $213 million less than the Illinois State Board of Education has proposed.

In his Feb. 18 budget address, Blagojevich advocated boosting the total elementary and secondary education budget to $5.7 billion in fiscal year 2005, a 6.5 percent increase over the current fiscal year. But Blagojevich later indicated, on March 2, he also is considering the creation of new funding sources for public schools.

"We need to invest more money in our schools - and we need to make sure that the money we invest in our schools goes into the classroom where it belongs," Blagojevich said.

Critics said the governor's budget speech sidestepped the really tough decisions about how to allocate his $396 million in new school funds by simply indicating that the legislature should make those decisions. Should the new revenue be spent primarily on general state aid, for example, or on specific programs like special education and transportation or other purposes? The governor did not say.

Blagojevich did say he wants to close 42 so-called corporate income tax loopholes in order to generate from $300 million to $400 million in new money for state coffers. "In 1980, one in every five income tax dollars in Illinois was paid by corporations," he said. "Today corporations pay only one of every $9 in state income taxes."

Among the so-called tax loopholes targeted by the governor are generous depreciation rules that save companies $74 million and foreign tax havens that save firms $40 million. Blagojevich said that because of such loopholes, 40 of the largest corporations operating in Illinois pay no state income tax.

While the governor departed from state budget-making tradition by declining to offer detailed spending plans, he did suggest spending $33 million for his new school programs. That includes $15 million for school specialists to raise reading scores, and $10 million to provide a book each month to every Illinois child from birth to age five.

The governor also identified the following areas as priorities, but did not specifically allocate the amount of increase for each area: general state aid; mandated categoricals; early childhood education; ADA block grant; and bilingual education.

The governor's plan includes transferring the following programs to agencies under his purview: Regular and Special Education Orphanage programs to the Department of Children and Family Services; Early Intervention, Truant Alternative and Optional Education Program, and Regional Safe School programs to the Department of Human Services; General Equivalency Diploma to the Illinois Community College Board; and Agricultural Education to the Department of Agriculture.

In January ISBE proposed an increase of $609 million in new funds over FY04. ISBE's proposal includes a $250 per pupil increase of general state aid, which alone would cost $396.5 million. ISBE's budget also calls for: restoring the School Safety and Educational Improvement (ADA) Block Grant to its FY03 level of $66.9 million, an increase of $24 million; and providing an additional $139.1 million to fully fund the state Mandated Categorical grants, including special education and transportation.

Lawmakers are expected to begin seriously considering legislation to enact the state budget when the General Assembly returns on March 23 from a two-week adjournment. In the meantime each legislative caucus-each party in each house-will prioritize its own list of proposed allocations and revenue sources.

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Near-record tax propositions land on March ballots

School tax referendums will appear on ballots in near-record numbers at the March 16 primary, continuing a trend school leaders say mirrors the state's worsening school financial crisis. With nearly 75 percent of Illinois school districts mired in deficits, and with government support stagnating in relation to mandated costs, a growing number of districts have pursued local property tax hikes just to sustain basic educational services.

A total of 91 school tax increase propositions will appear on March 16 primary ballots, the highest number of tax questions at any election in at least 15 years, according to IASB records. That is just over the recent high of 89 that appeared on last April's ballots, and it is more than twice the state's average (38) over the last 15 years.

"It's a sign that we have drastic problems. They're all desperate, and they're leaning again on that property tax, and you just can't do that anymore," said Alan Hickrod, a leading proponent of school funding reform, and retired Illinois State University professor. Hickrod added that state tax increases to support schools are long overdue.

Robert Schiller, state superintendent of education, noted that the number of tax referendums has climbed recently as the state's share of funding for school districts has fallen from a contemporary high of nearly 40 percent to just over 36 percent.

But tax rate increases historically have met with considerable resistance, as voters have approved only 36 percent of the 1,223 tax rate proposals since the election of April 1989 (see the "historical look at tax rate proposals" on IASB's Web site at www.iasb.com/files/taxrate.htm).

Bond issues have fared much better at the polls, with voters approving 59 percent of the 986 bond issues placed on ballots since April 1989 (see the Historical Look at Bond Issue Proposals on IASB/s Web site at http://www.iasb.com/files/bondiss.htm).

But the number of bond issues appearing on the ballot has not been particularly high in recent years. Nor will this change in March, when just 28 bond issues will go before voters, compared to an average of 31 since April 1989.

The 28 bond issues on the ballot this time around is the lowest total for any March primary since 1990, when just 20 bond issues were placed before voters. Insiders say the low number of bond issues lately may result from the billions of dollars the state has put into local school building projects. A significant influx of school infrastructure funding began with the "Illinois First" program launched by Gov. George Ryan in 1998.

Bond issues and tax questions aside, a number of other significant ballot questions will appear in March. One is an advisory question posed by local government bodies regarding Lt. Gov. Pat Quinn's Taxpayer Action Amendment plan. Approval by voters would be the first step in Quinn's plan for doubling the Illinois income tax for state taxpayers who earn over $250,000.

Such a tax increase would impact only 1.4 percent of Illinois residents but would reel in nearly $1.15 billion, with half of that revenue going to schools on a per pupil basis. That amounts to about $277 for each of the state's 2,071,391 students.

Quinn's advisory referendum will ask voters whether to create an education trust fund supported by increasing the state income tax on individuals who make more than a quarter-million dollars annually. For such a constitutional amendment to be enacted it would need to be approved by 60 percent of the state's voters, and the legislature would need to approve it by an extraordinary majority vote of three-fifths of the members elected to each house.

Cook County and Chicago are the two most populous of the 39 local governments that have placed this advisory referendum on the March 16 general primary ballot. Only 24 counties, 8 municipalities, 6 townships, and one school district will consider the question, but the advisory proposition likely will go before more than 1.1 million voters. That is nearly half the state's anticipated voter turnout, based on the March 2002 total vote of 2,267,152.

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Bill would cap property assessments statewide

The Illinois House approved legislation on Feb. 20 that would allow a county board to impose a 7 percent cap on the assessment of residential property for tax purposes. The measure would create an additional homestead exemption that caps increases to seven percent per year on the first $25,000 in higher assessments.

The bill, S.B. 1498 (Cullerton, D-Chicago), was amended in committee by newly appointed Rep. Lisa Dugan (D-Kankakee) to allow all Illinois counties to opt in. It was an initiative of Cook County Assessor Jim Houlihan and Chicago Mayor Richard Daley, apparently in response to major increases in property tax bills in Cook County.

The bill, as amended, includes the following provisions:

• Each county will be allowed to pass an ordinance to "opt-in" to the assessment cap. A period of six months will be allowed for "opting-in."
• The 7 percent homestead assessment cap would include a provision that clarifies "base homestead value" is the EAV of the property for tax year 2002 prior to exemptions, minus $4500 (Cook) or $3500 (other counties).
• The 7 percent Cap or "adjusted homestead value" would be the property's base homestead value limited to an increase of 7 percent for each tax year after 2002.
• Only single-family houses, owner-occupied apartment buildings of six units or less, units in cooperatives, and units in life-care facilities would be eligible for the cap.
• The exemption under the cap would not exceed $25,000 for any taxable year.
• The cap would be in place for only three years.
• The school aid formula would be amended to include "hold harmless" language intended to prevent Cook County and "opt-in" counties from using their adoption of this assessment cap to increase their schools' share of state school aid above what they would have received had the county not opted in.

A copy of the bill and its amendments are available online at: www.ilga.gov/legislation/.

The bill has passed both houses of the legislature, but only the House has approved it in its amended form. Thus it is currently in the Senate, awaiting action on the Order of Concurrence to House Amendments. But the Senate has passed its own bill, tacked on to S.B. 2112, and is not anxious to support any other plan.

School management lobbyists who are opposed to S.B. 1498 say negotiations have to take place between the House and Senate.

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Bush education budget comes up short: NSBA

President Bush's 2005 budget proposal includes a $1 billion increase for Title I and a $1 billion increase for special education-far below what is needed to meet school districts' needs, according to the National School Boards Association.

Under the President's proposed budget, Title I would be funded at $13.3 billion, well below the $20 billion Congress authorized for fiscal year 2005 when the No Child Left Behind Act was passed back in 2002.

The Administration proposal includes a 3 percent increase for the U.S. Education Department-an overall increase of $1.7 billion-the lowest percentage increase for education in nine years. The budget also would eliminate 38 education programs with total funding of $1.4 billion. Among them would be the $247 million Even Start program.

Nearly 80 programs would be frozen at 2004 levels. These include Improving Teacher Quality state grants, 21st Century Community Learning Centers, impact aid, and the rural education program.

In addition, documents prepared by the Office of Management and Budget indicate that Title I would be cut in subsequent years to reduce the federal deficit.

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Houlihan urges school funding overhaul

Cook County's assessments supervisor recently told a gathering of Illinois farmers the state's system of funding schools is broken, and they must urge lawmakers to raise income and sales taxes in exchange for reducing local property taxes.

Jim Houlihan told Illinois Farm Bureau (IFB) members that unless school funding is overhauled students in rural areas won't get as strong an education as students in many other areas.

"The Illinois tax system is broken. Rural areas with high property taxes do not have enough funding for schools," Houlihan told an IFB government leadership conference in Springfield on Feb. 24.

Houlihan represented Chicago's north lakefront-Lincoln Park/Lakeview neighborhoods-in the Illinois House from 1972 to 1978. He spoke as a member of "A+ Illinois," a newly formed coalition of 100 groups that includes the IFB, as well as some other business groups. Other A+ Illinois members include the Illinois Education Association, the Chicago Urban League, the Metropolitan Planning Council, Voices for Illinois Children, the American Federation of State, County and Municipal Employees Council 31, and the Center for Budget and Tax Accountability.

Despite the coalition's plea for lawmakers to revise the tax system, Houlihan admitted it's an uphill battle: "Gov. Blagojevich has said he will not increase sales and income taxes," said Houlihan. The governor has since said he is considering other ideas to generate additional money for schools.

"But the time is right. Our broken tax system affects more than education," said Houlihan. "It drives longtime residents out of neighborhoods and drives out Illinois businesses," he added.

Houlihan said the A+ Illinois coalition believes that a revised education funding plan should:

• Provide $4.5 billion in property tax relief or 25 percent of the money now collected.
• Provide $1.5 billion more for schools.
• Reduce general education fund levies by 50 cents.
• Increase the state income tax rate for individuals from 3 percent to 4 percent.
• Increase corporate income taxes from 4.8 percent to 6.4 percent.
• Reduce sales tax rates by one percent, but eliminate tax exemptions that create negative economic impact.

The individual income tax rate in Illinois currently is a flat 3 percent of federal adjusted gross income. The rate has been increased by only .5 percent since the tax was first enacted in 1969. Rates are higher in the two nearby states that also levy flat-rate income taxes: Michigan, at 4.2 percent of taxable income; and Indiana, at 3.4 percent of adjusted gross income.

The state's corporate income tax rate currently is 4.8 percent of federal taxable income. The rate has been increased by only .8 percent since the tax was first enacted in 1969.

The sales tax rate in Illinois is roughly on a par with that of neighboring states. The 6.25 percent rate, with numerous exemptions such as for food and drug sales, includes 1.25 percent collected by the state but paid to local governments. That rate has remained unchanged since 1990. Rates of sales taxes imposed in other states range from 3 percent in Colorado to as high as 7 percent in Mississippi and Rhode Island.

For more information, visit the "A+ Illinois" Web site at www.workwelfareandfamilies.org/PDF/APlusEndorsement.pdf.

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File 2004 economic interest statements

State law requires school board members, certificated administrators and some non-administrative school district employees to file annual economic interest statements by May 1 with the clerk of the county where they reside. Such statements must be filed by May 1 unless the individuals required to file have already done so this calendar year.

Generally required to file are local school district superintendents, school business officials and certificated administrators. Others include: department heads responsible for large contracts ($1,000 or more), those who have authority to issue or promulgate school district rules, and employees who have supervisory authority for 20 or more employees.

Those who have not received forms by mail should contact their county clerks for the economic interest forms or to obtain additional information.

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Those Who Excel Awards to be presented April 17

Nominations are now set for the state board's Those Who Excel Awards for individuals and groups that have made outstanding contributions to education. The deadline for submitting nominations was in January. This year, several Illinois school board members have been nominated for the honors. Awards will be presented April 17 after an announcement of winners is mailed in March, according to ISBE. To check whether your nomination was received or to learn about the awards ceremony, call ISBE's Public Information office at 217/782-4648.

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Examine the Impact of
Court Decisions on School Diversity Policies

Visit IASB's Web Site to Download Issue
Analysis Prepared by NSBA's Legal Counsel

If your school district uses race as a criterion in pursuing school diversity, you need to know the standards that federal courts have applied to such policies. An analysis of the issue prepared by the legal counsel for the National School Boards Association is now available for downloading from the IASB Web site. You will find the portable document file (Acrobat) at www.iasb.com/grutter1.pdf

While you are at the IASB Web site, be sure to sign up for the Online Update if you have not already done so. The Update is an email announcement of new additions and other important changes on the IASB Web site. You can register to receive the Update at www.iasb.com/elinks.cfm.

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THE NATIONAL SCENE

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Utah House rebukes NCLB over unfunded mandates

Although the measure has since stalled, the Utah House voted overwhelmingly on Feb. 10 to bar the state from using local funds to comply with the provisions of the federal No Child Left Behind Act of 2001 (NCLB). Advocates said NCLB encroaches on the state's right to establish its own education policies and the unfunded cost of implementing it is too high.

The states say they need an average of 28 percent more a year to meet NCLB requirements, according to an 18-state study by William Mathis, a school superintendent and education finance professor in Vermont. That would amount to a $118 billion increase over the $422.7 billion spent by local, state and federal governments on education nationally in 2001-2002.

Utah is not alone in finding fault with NCLB. Virginia's Republican-led House overwhelming adopted a resolution in January asking Congress to exempt it from the act, calling it "the most sweeping federal intrusion into state and local control of education in history." And lawmakers in Arizona, New Mexico, Wyoming and Minnesota introduced legislation in February to exempt their respective states from NCLB requirements.

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Study shows shortcomings of proposals on Head Start

An independent report from the National Institute for Early Education Research (NIEER) released on Feb. 20 appears to vindicate those who have argued that the vast majority of states are unprepared to take on the job of running Head Start.

The White House recently sought to replace Head Start programs under a block grant program envisioned by House Republicans.

But the new report, The State of Preschool, said: "... state preschool programs are failing the nation's children. Few set high standards and fewer still provide adequate funding."

Source: NIEER Web site, located at: http://nieer.org/yearbook/.

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Village officials in Bartlett won't be allowed to e-mail each other except in rare circumstances, under a new ordinance designed to head off future violations of the Open Meetings Act ... Elgin's City Council recently created a resolution urging Dist. U-46, Elgin, to reconsider its boundary map and its plans to close one elementary school. City attorneys also ordered the school district to pass along all relevant documents under the Freedom of Information Act (Daily Herald, Feb. 2, 2004) ... The Illinois Teacher's Retirement System on Feb. 20 announced the firing of MFS Investment Management as a teacher's pension fund manager directing investment of $664 million. A complaint by the U.S. Securities and Exchange Commission led TRS to jettison the firm. MFS reportedly had agreed to a $225 million settlement with the SEC over accusations of improper trading (Reuters, Feb. 20, 2004) ... U.S. Secretary of Education Rod Paige recently called the NEA a "terrorist organization." Paige's Feb. 23 comment about the National Education Association-the nation's largest teachers union-was made at a private White House meeting of governors and was in reference to NCLB negotiations ... The "Dick and Jane" readers are back in print after a 34-year hiatus. (USA Today, Feb 26, 2004).

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NEWS FROM IASB

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IASB leaders undertake ‘mission' of learning

The session, led by Anna Lovern, director of policy services, and Angie Peifer, director of school board development, centered on helping board members understand their trustee role of reflecting their community's values.

"The important message," Peifer told conference attendees, "is that your responsibility is not to create a mission and vision for your schools, but to detect it."

That detection takes the ability to conduct public engagement to seek out different perspectives. It results in give-and-take among people and produces a core set of beliefs that the community holds about education - not just individual views that focus on what people think.

From that public engagement, Lovern said, boards then must be able to articulate a compelling, shared vision for the district that will align the entire system and guide the board in all of its work.

Comments from participants included some who said they wished their entire board could have heard the presentation. For others, it reaffirmed that a process they currently use has them on the right track. "Even for an experienced board member this helps tie mission with implementation," wrote another.

The workshop, called "The Board's First Responsibility: Detecting and Communicating a Compelling Vision," is one of the core pieces of IASB's School Board LeaderShop series.

The same IASB workshop is scheduled for two locations in April. This workshop aims to give you the tools to know what the people in your community want and value. It will be offered from 8 a.m. to 3:00 p.m. on: 1) April 17 at the Hyatt, Lisle, and 2) on April 24 at the Holiday Inn, Mt. Vernon.

For more information visit IASB's Web site at www.iasb.com/calendar/calendar.cfm.

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National workshop focuses on real work of boards

A school board that has a clear mission, vision and goals, as well as a focus on policy making, is on the right track to have a positive effect on student learning. But what does that look like? And how does it happen?

Those two questions are to be answered in "Focusing on the Real Work of Boards" (3:45 p.m. Monday, March 29, at the annual convention of the National School Boards Association in Orlando). The presentation-led by Linda Dawson, IASB's director of editorial services; Sandy Gundlach, IASB field services director; and Cathy Talbert, IASB senior director of policy services-details the four-part process of "Targeting Student Learning."

By using the TSL process, boards can assess their existing policies and determine how they relate to student learning. After an information-gathering process, they can decide whether the existing policies are acceptable or if they need to be focused anew upon student learning.

The TSL process also connects with NSBA's "Key Work of School Boards." While Key Work identifies eight "action" areas for boards around student achievement, Targeting provides a process for how boards can work in those areas at a policy level.

While the process has helped to focus board members on their policy work, it also has helped superintendents. As one said: "Board members need to have a better working knowledge of the policies in order to make informed decisions. And by talking about policies, the lines of communication open up into other arenas."

"Targeting Student Learning," an 85-page soft-cover book, was developed by a five-state group of school board associations: California, Illinois, Maine, Pennsylvania and Washington state.

But after the book was available, Talbert said, it became apparent that board members could use more assistance in learning how to start these critical policy conversations. The result was the "Targeting Student Learning Workbook," which provides comprehensive questions for boards to ask when discussing one of the eight policy topics that help boards focus on student learning.

Both "Targeting" books are available at the IASBOnline Bookstore at: www.iasb.com/shop/.

For more information visit NSBA's conference Web site at: www.nsba.org/conference/ .

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WORKSHOPS & MEETINGS

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IASA conference to offer academy credit courses

The Illinois Association of School Administrators' School of Professional Development is offering all 12 administrators' academy credit courses as pre-conference activities in conjunction with the IASA Annual Conference on Wednesday, April 28.

This year's conference, "A Legacy of Pride-A Future of Responsibility" will be held April 28-30 at the Hilton and Renaissance Hotels in Springfield. For more information phone IASA at: 217/787-9306 or e-mail: cmiddleton@iasaedu.org.

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Learn to reduce diesel fumes from buses in free workshops

A series of 10 "clean school bus" workshops now are being held throughout Illinois to provide key information to school leaders on reducing harmful emissions from diesel-powered school bus fleets. Participants may learn how to help create a cleaner, healthier learning environment for school children.

The free workshops-available in various locations through May 12-are hosted by the Illinois EPA, and designed to provide an overview of the Illinois Clean School Bus Program. The workshops will offer assistance to school districts on the many options available, including funding, to benefit children and communities. For more information visit: www.epa.state.il.us/air/cleanbus/ .

Those interested in attending one of the workshops should contact the Illinois EPA at 217/558-7198. A list of dates and locations for the workshops is available at: www.epa.state.il.us/air/cleanbus/pdf/2004-workshops-clean-school-bus.pdf.

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FEDERAL UPDATE

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ISBE warns Chicago schools on special ed segregation

Disabled students in Chicago public schools have been unlawfully separated from regular classrooms and unless the practice stops, the state will take over special education spending. So says a new report from the Illinois State Board of Education (ISBE), which is responsible for monitoring special education students' treatment.

A report issued by ISBE's special education division in February said Chicago Dist. 299 has violated federal law by not serving special education students in "the least restrictive environment." Dist. 299 says the report "overstates" the problem.

The report is an annual one stemming from the 1998 legal settlement in the case of Corey H. v. Chicago Board of Education and Illinois State Board of Education. In that case, a federal court ordered ISBE to prepare a remedial plan to end the segregation of disabled students in Chicago, and to monitor and report on progress.

Federal education officials have pressured ISBE to be more assertive in monitoring special education programs. In a Dec. 31, 2002, letter the U.S. Department of Education told ISBE the agency was flouting federal law by failing to properly monitor special ed integration.

ISBE gave the district up to two months to solve the alleged shortcomings, otherwise the state could take control of Chicago's federal special education funds for the 2004-05 school year.

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Illinois FRN delegates lobby Congress on schools' behalf

Illinois school board members from local boards and IASB directors and staff recently attended two days of briefings on federal education issues and then spent a day lobbying Congress. The 2004 Federal Relations Network Conference, February 1-3, was sponsored by the National School Boards Association and participants said it was again a big success.

Members of IASB's board of directors who led the delegation were: Ray Zimmerman, IASB President (Flanagan C.U. District 4), Marie Slater, IASB Vice-president (Wheaton Warrenville C.U. 200), and Christy Coleman, IASB Immediate Past President (Geneseo C.U. District 228). IASB executive director Mike Johnson also attended.

The FRN delegation visited congressional offices on Feb. 3 to discuss funding and reauthorization for special education, No Child Left Behind Act implementation, and school lunch program reauthorization. "We accomplished a great deal on behalf of Illinois public schools," said Ben Schwarm, IASB governmental relations director.

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