Governor Blagojevich Proposes $1.5 Billion Increase in Education Funding

In his address to the General Assembly last Wednesday, March 7th, Governor Blagojevich proposed a record budget increase for the funding of public education in Illinois. He went well beyond the previously published budget requests for elementary and secondary education.

Priorities

Increase Foundation level funding to $6020 per student – Cost $808 million

Increase Reimbursement for Special Education Teachers to $13,000 per teacher from $8,000 – Cost $209 million

Additional Early Childhood/Pre-school offerings – Cost $69 million

Teacher and Administrator Quality – Cost $40 million

Pay down Pensions by $26 billion in cash by selling the Illinois Lottery and refinancing existing bonds

The Governor has proposed a Gross Receipts Tax (GRT) to finance this plan. This new tax would tax sales, manufacturing, construction and other business activities at a very low rate and also tax services at the rate of 1.8%. Companies with less than $1 million in revenues would be exempt from this new tax.

This new tax proposal has already created a firestorm in the Illinois business community. This budget request will precipitate one of the largest discussions and debates ever seen in Springfield.

Links to Governor Blagojevich’s budget proposal:
http://www.il.gov/education
http://www.state.il.us/budget