* Charlie Wheeler has the best criticism I’ve yet seen on the proposal by House Speaker Michael Madigan and Gov. Pat Quinn to mail out $500 “property tax rebate” checks before the November election…
Quinn touted the idea as “the most significant property tax relief in state history,” at best a dubious claim for a couple of reasons. Chief among them is the fact that the annual $500 check would not be linked at all to actual property tax payments, nor would the giveaway benefit everyone. Indeed, homeowners whose tax bills exceed $10,000 actually would lose money under the governor’s plan, because they’d no longer have the current income tax credit equal to 5 percent of property taxes paid. Renters would get nothing, even though they also pay property taxes as part of their monthly payments.
The governor likened his plan to former Gov. Jim Edgar’s 1997 effort to raise income tax rates to provide more money for local schools and to cut local property taxes, also a stretch if not downright mendacious. The key difference: A major feature of the Edgar tax swap proposal called for a dollar-for-dollar reduction in local school levies for some $900 million in additional state aid, which analysts at the time estimated would amount to almost a 30 percent cut in school operating taxes. Quinn’s plan ignores local property tax levies altogether.
In addition to property tax relief, the Edgar proposal also would have increased state aid to poorer school districts by some $600 million; the only way the governor’s $500 checks would help struggling schools would be if the folks who got them splurged at PTA fundraisers.
Still, maintaining income tax rates at current levels, as Quinn wants, is critical to the financial well-being of the state’s schools, which would lose more than $600 million in general funds otherwise, according to budget documents. With the rates in place, the budget recommends a $291 million general funds increase.
Using the $700 million in net new cost for those rebate checks could boost that school spending increase to a billion dollars.