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March 10, 2007

Illinois Education Association backs Governor Blagojevich's Helping Kids Learn plan
Governor announced plan to boost school funding by $10 billion over four years; three times larger than any increase in state history

CHICAGO – Governor Rod R. Blagojevich today accepted the endorsement of the Illinois Education Association (IEA) for the Helping Kids Learn plan, which will invest an unprecedented $10 billion in schools over the next four years – nearly three times bigger than any increase in state history.  In the past four years, Governor Blagojevich has provided $3.8 billion in new education dollars to Illinois schools, which had been chronically neglected and under-funded for decades before. Speaking before the IEA at their annual meeting attended by more than 1200 delegates, the Governor explained that under the new plan, Illinois students will be sure to have a good place to learn, strong teachers and administrators, quality materials, enough time to learn, and the financial resources to get it done.
“Every year we do not fully-fund our school is another year for materials to become outdated, our schools to deteriorate, and students to fall behind. I say we wait no longer, and I call on the Illinois General Assembly to join me in supporting our children’s education,” Governor Blagojevich said. “In Illinois, we are done with baby steps; we need change, and we need it now.”
“The future's best jobs will be found in states capable of providing a well-educated workforce.  With this plan, Governor Blagojevich is proposing that Illinois invest in excellence and he has earned our strong support,” said Ken Swanson, IEA President to express his organization’s endorsement for the Governor’s plan.
Helping Kids Learn continues the Governor’s commitment to schools by boosting funding by an unprecedented $1.5 billion in Fiscal Year 2008.  Under the plan, general state aid to schools will increase by $800 million, raising the Foundation Level by $686 to $6,020.  With more funds per pupil, schools can make investments to improve textbook quality, modernize their technology, or invest in teachers. Earlier this week, Chicago Public School’s chief Arne Duncan and Chicago Teacher’s Association President Marilyn Stewart expressed their support for the Governor’s plan.
Under the plan, the state will give schools additional funds to help afford special education teachers with $200 million in new spending that will increase the state’s reimbursement rate for special education teachers – the first increase districts have seen since 1985.  With $153 million, the Governor’s plan will fully fund ‘mandated categorical’ programs like special education and transportation.  The plan will also accelerate implementation of Preschool for All with $69 million in state support and dedicate additional resources for school districts that provide full-day kindergarten.  
The Helping Kids Learn plan provides $100 million to support underperforming school districts that invest in after school tutoring, curriculum and textbook enhancements, longer school days or other proven strategies that raise student achievement. For Illinois’s deteriorating schools, the plan will invest $1.5 billion in a capital construction plan for projects to improve and upgrade classrooms and schools so children can learn and teachers can teach in a more conducive environment. 
 Endorsing the Governor’s education plan today was the IEA who boasts 128,000 members and is the largest education employees' organization in the state. IEA represents teachers, educational support professionals, higher education faculty and staff, retired education employees and students planning to become teachers.
The Governor’s Tax Fairness Plan, unveiled during his budget address Wednesday, will raise funds for schools, healthcare, and paying down pension debt.  In Illinois, the share of state revenues coming from individual income taxes has consistently increased during each of the last three decades.  The state income tax burden lies primarily with individuals – many who are struggling to make ends meet – while the burden on businesses has gone down, even while corporations are posting record profits.  Gov. Blagojevich’s Tax Fairness Plan will reverse that trend. 
The Governor’s Tax Fairness Plan implements a Gross Receipts Tax (GRT) that has been embraced by many economists because of its broad base and low rates.  States including Washington, Delaware and Hawaii have had a GRT for years, and recently, Ohio and Texas have adopted a form of the tax.  The tax will better reflect the changes in Illinois’ economy since the Corporate Income Tax was implemented thirty years ago when goods dominated the state’s economy.  Today ‘new economy’ businesses – primarily services – represent the majority of Illinois’ business activity.  In fact, goods-based businesses make up only 35 percent of Illinois’ economy, but pay 53 percent of the corporate income tax; services-based businesses make up 65 percent of Illinois’ economy, but pay only 47 percent of the corporate income tax.
The GRT will only apply to businesses that make more than $1 million each year, which means that small businesses – 75 percent of all businesses in Illinois – will be exempt.  The GRT will tax service industries at a low 1.8 percent, while manufacturers, construction, retail and wholesale companies will be taxed at an even lower .5 percent.  Exports will not be taxed.  The plan also mitigates costs being passed on to consumers by excluding certain goods, such as retail food and pharmaceuticals.  By transitioning to the GRT, Illinois will rid itself from loopholes that major corporations have exploited and used to their advantage to avoid paying their fair share of taxes to the state, and is expected to generate $3 billion in new revenue in fiscal year 2008, and more than $6 billion during its first full year in effect.


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