Noland ties U-46 fix to tax swap

Less than a week after winning a close re-election fight, state Sen. Michael Noland is playing hardball with a bill that could net an additional $22 million for Elgin Area School District U-46.

The bill, which Noland introduced in October 2009, addresses an issue stemming from U-46 overlapping three counties.

U-46 officials believe the issue is leading the district to lose millions in state funding every year.

Noland's bill aimed at fixing the problem passed both houses before Gov. Pat Quinn vetoed the measure in July, saying it would “boost state aid to one district at the expense of others.”

Under the state constitution, first the state Senate, then the House would have to muster a three-fifths majority to override the governor's veto.

But Noland, who controls whether that process takes place because he introduced the bill, said Friday he may not pursue an override if U-46 officials do not formally support House Bill 174, which would raise the income tax rate in exchange for property tax relief.

“What I would like from the (U-46) school board is a letter ... supporting HB174, which is what is necessary to fund (Senate Bill) 2499,” the U-46 funding fix, Noland said.

Noland wants U-46 to send the letter to lawmakers who represent the district, including Reps. Keith Farnham, Randy Ramey and Fred Crespo, all of whom are co-sponsors on the U-46 funding fix.

The “tax swap” bill, which would push the income tax rate for individuals from 3 percent to 5 percent while increasing the property tax credit from 5 percent to 10 percent, passed the Senate in May 2009 but has been stalled in the House for more than a year.

Noland believes U-46, as the state's second-largest school district, could help persuade lawmakers in the House to pass the measure.

“Absent HB174, the votes will not be there” for the U-46 fix, Noland said. “Unless they're going to help me to help them, I think that this would be a futile effort.”

But U-46 officials said it is unfair for Noland to tie the U-46 funding bill to a sweeping change in the tax code that would affect the entire state.

“One has the do with the ability of our district to tap its rightful property taxes, and the other is statewide taxing legislation,” U-46 board President Ken Kaczynski said. “In my mind, they're separate.”

This is not the first time Noland has asked U-46 to support the tax swap. In June, Superintendent Jose Torres and Kaczynski sent Noland a letter saying they would not oppose the idea but that statewide tax policy should be left to the state legislators.

“Whether the solution is House Bill 174, pension borrowing, raising taxes, or other actions, we count on our state officials to make the best decision for the children of Illinois,” the letter reads.

A district spokesman said Friday he doesn't expect the board's position to change.

“They generally don't take positions on specific bills,” U-46 spokesman Tony Sanders said. Because it addresses an issue specific to U-46, “SB2499 is an exception,” he added.

Farnham, the chief House sponsor of the U-46 funding bill, said he will push hard for an override of Quinn's veto in the House but cannot do that until Noland advances the bill in the Senate.

“I'm just working with the leaders on both sides to try to line up everything to get it to go through,” Farnham said. “I have 113 votes to begin with, so we ought to be able to do that.”

Noland estimated the tax swap would bring in an additional $7 billion while reducing property taxes by about $1 billion. School districts have been hesitant to support the measure because they view property taxes as a more stable revenue source than state aid.

The state still owes school districts an estimated $1.198 billion from last year and this year, according to the Illinois State Board of Education.

The veto session starts on Tuesday.