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February 19, 2004

Gov. Blagojevich’s school funding and accountability plans win support of Chicago educators
Governor Says State Must Choose Between Schools and Corporate Loopholes Governor joined by Chicago Public Schools’ CEO Arne Duncan in calling for overhaul of education system in Illinois, more money for classrooms

CHICAGO – One day after he delivered his second annual budget address to a joint session of the General Assembly in Springfield, Gov. Rod R. Blagojevich was joined by Chicago Schools’ CEO Arne Duncan as he rallied support for his plans to increase funding and accountability for schools in Illinois.
In January, Governor Blagojevich proposed sweeping reforms to overhaul the education bureaucracy in Illinois, and bring more accountability to the system by creating a Department of Education that reports directly to the Governor.  In yesterday’s budget address, the Governor outlined his plan to invest an additional $400 million into K-12 education in fiscal year 2005 – the Governor’s second major increase in as many years despite historic deficit levels. 
In fact, in the first two years of his administration, despite facing a total deficit of $6.7 billion, if the legislature accepts the Governor’s budget, the state will have invested $800 million in new spending for education.  Under Blagojevich, these two years of new education funding amount to more than the entire term of George Ryan, and double the entire first term of Jim Edgar. During times of deficit under Gov. Edgar, in FY 92 and 93, education spending was reduced by $5.4 million; and under Gov. Ryan, in FY 02 and FY 03, $161.3 million was invested in education.
Blagojevich said that the only way the state can pay for his proposed $400 million increase for schools is if lawmakers agree to close corporate loopholes that allow 1% of Illinois businesses to avoid paying taxes in Illinois.  In 2000, 2001 and 2002, 40 Fortune 100 companies who do business in Illinois successfully avoided paying income taxes in Illinois.
“We have to choose whether we want to help our schools or whether we want to keep loopholes on the books – loopholes that allow corporations to hide their assets in places like Bermuda or the Cayman Islands and avoid paying their fair share, and loopholes that allow people buying yachts to avoid paying sales taxes.  It’s yachts or schools.  I choose schools,” Blagojevich said.
The Governor said that investing more money in schools goes hand in hand with reforming the education bureaucracy in Springfield.  Blagojevich is asking the legislature to approve a proposal to shift responsibility for managing the state’s schools away from the Illinois State Board of Education to a new Department of Education that will be directly accountable to the governor and lawmakers, a proposal supported by Duncan at today’s press conference. 
“While Illinois still has a long way to go before the state is truly meeting its responsibility to kids, our schoolchildren are doing much better under the current governor than under any other recent governor in this state,” Duncan said. “For that reason, I support the Governor’s push for greater accountability. He is accountable to the people of Illinois – and he should be in a position to hold school districts across Illinois accountable for the quality of education.  He has earned this right and he should either control ISBE or he should do away with it.”
“Without accountability, our schools won’t improve.  Otherwise, it’s like pumping gas into a car with a broken fuel pump.  You can pump all the gas you want, but unless you fix the fuel pump, the car still isn’t going to run,” Blagojevich said.
Currently, Illinois ranks 16th in the nation in total per pupil spending, but only 40th in the nation when it comes to how much of that money is actually invested in the classroom, with only 46 cents of every education dollar used for classroom instruction.  The Governor’s primary goals for the new agency are to reduce bureaucratic red-tape that siphon energy and resources away from instruction and to develop strategies to help schools districts save money on supplies and services so more money can be directed to classrooms.
In addition to proposing $400 million in new funding for education, the Governor’s budget proposal includes:
  • No increase in the income tax;
  • No increase in the sales tax;
  • Reducing the size of the state workforce to the lowest level in thirty years;
  • Offering a targeted Early Retirement Initiative for 2,000 employees in administrative, non-frontline positions;
  • Increasing health care spending by $650 million, including funding to help provide health insurance to 65,000 children and 300,000 working parents;
  • Consolidating state offices and agencies, including merging the Departments of Insurance, Professional Regulation, Banks and Real Estate, and Financial Institutions into one, new Department of Financial and Professional Regulation;
  • Reorganizing the Illinois State Police to move officers from behind desks onto the frontlines, adding 400 new officers over the next 4 years, and providing new technology, training and equipment for public safety;
  • Funding the Governor’s Opportunity Returns initiative – regional plans targeted at promoting job growth;
  • Changing the MAP grant formula, which provides financial assistance for students to pay for college, so that 1,000 more students will be eligible for help;
  • Requiring social service providers who receive state grants to start accounting for how they spend state money;
  • Closing corporate loopholes that allow major corporations to hide their income and cheat taxpayers; and
Proposing five major structural reforms to help the state get its fiscal house in order, including:
(1)Requiring all new spending considered by the General Assembly to identify new revenues or spending cuts to pay for it, so that the state stops spending more money than it has;
(2)Requiring every state agency to submit monthly spending plans and quarterly budgets, so that budgets reflect real life, and not just one-time estimates;
(3)Requiring every state agency to set aside 2% of their budget for emergencies;
(4)Requiring the state to pay its bills within 60 days and create a revolving loan of credit to reduce interest costs;
(5)Requiring that every billion dollar increase in the state budget be accompanied by a new, $50 million investment in the Rainy Day Fund;


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