* The Illinois House Republicans blast the proposed constitutional amendment to impose a 3 percent surcharge on personal net annual income above $1 million…

Democrats claim this proposal would provide property tax relief, but that raises an obvious question: why do they need to create a new tax in order to lower taxes? If they are serious about relief, they could simply call Representative Dan Ugaste’s HB 9 for a vote and deliver real property tax relief to Illinois families.

It has long been recognized that the state’s underfunding of K-12 education has contributed greatly to the local property tax burden. That costs real money. You either raise income taxes (what used to be known as the tax swap) or slash state government spending.

* From the Rep. Ugaste’s HB 9 synopsis…

Provides that, in exchange for receiving a grant, a school district’s maximum aggregate property tax extension for the taxable year that begins on January 1 of the fiscal year for which the grant is awarded may not exceed an adjusted maximum aggregate property tax extension for that taxable year.

* This is how the proposal is funded…

The Education Property Tax Relief Fund is created as a special fund in the State treasury. By September 1, 2025, and by September 1 of each year thereafter, the Governor’s Office of Management and Budget shall certify to the State Comptroller and the State Treasurer an amount equal to the difference, if any, between (i) 25% of the total amount appropriated from all State general funds as part of the State budget for the fiscal year that begins on the immediately preceding July 1, including any amounts appropriated for the purpose of making grants under this Section, and (ii) the total amount appropriated by the State, including any continuing appropriations, for that fiscal year as State contributions to the [pension funds].

Since state pension spending is roughly 19-20 percent of the state budget every year, the proposal would sweep five to six percent (25 minus 20 or 19) of all General Revenue Funds and divert it to property tax relief grants to school districts.

That means $2.8 to $3.4 billion would have to be cut from annual state spending next fiscal year - at a time when the federal government is slashing aid to states, schools and local governments.

If the resulting cuts were across the board, K-12 spending would have to be reduced between $771 and $926 million.

Also, like the proposed constitutional amendment, the money would be distributed on a per-pupil basis. As we discussed yesterday, that could very well mean the state will then have to come up with more funding for its Evidence-Based Funding law to “reverse the added inequity,” as one administration official explained.