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updated: 5/10/2012 11:27 AM

Pension funding debate plays into old city-suburb divisions

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SPRINGFIELD -- For decades, reformers tried to raise income taxes and send more money from the state's wealthier taxpayers to Illinois' poorer schools to put education funding on a more even footing across the state.

Suburban lawmakers often decried such plans because suburban taxpayers were often seen as losers in the deal. Even if property tax breaks helped offset an increase in the income tax, the argument went, suburban taxpayers would have been sending their money to schools far away from home.

That debate generally is gone for now -- done in when the state raised income taxes last year without addressing how schools are funded.

But it's been replaced by a new argument, with equally divisive regional politics, that also plays on the disparity between the relative wealth of some suburban school districts compared to many downstate and Chicago schools. This time, Democrats including Gov. Pat Quinn and top legislative leaders are pushing a proposal to have local school districts and community colleges outside Chicago take on the state's share of paying for teachers' retirement costs.

They argue that suburban and downstate schools should pay for teachers' pensions because Chicago schools already do. The top Republicans -- Rep. Tom Cross of Oswego and Sen. Christine Radogno of Lemont -- say Chicago schools already get state funding advantages that need to be weighed.

The resulting debate "certainly has that potential to be divisive geographically, even more than politically," said Ralph Martire, executive director for the Center for Tax and Budget Accountability.

Regional politics show up all the time in the biggest debates in Springfield, when how lawmakers vote can often be influenced more by where they live than by what party they're in.

In the fight over expanding gambling, for example, support often comes from lawmakers who see it boosting the area where they live with a new casino or allowances for slot machines at a racetrack. Opponents line up from areas that already have casinos and don't want more competition.

For schools, Martire helped support the push to fund schools more through income taxes, which are paid to the state, than from property taxes, which are generated and used locally.

It fueled regional divisions for years until the plan melted away as the state's budget picture degenerated.

Those funding proposals over the years often

called for raising the Illinois income tax rate to 5 percent to pay for schools and giving homeowners a property tax break in exchange.

But when lawmakers last year raised the income tax rate to 5 percent, it was to plug a growing state budget hole, not to help struggling schools. So the move to fund schools differently "went poof," said state Sen. Kirk Dillard, a Hinsdale Republican.

"That issue is no longer viable with a 5 percent Illinois income tax," he said.

The focus in 2012 is on pension reform, and even House Speaker Michael Madigan -- supporter of shifting pension costs to local schools -- says it'll be a regional battle. After all, he said, politics in Illinois have been split by region since the days of Abraham Lincoln.

"Well, it will be to the extent that you've got a bifurcated situation in the state," Madigan said. "But I wouldn't dwell on that."

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