SPRINGFIELD, IL - On Wednesday, the Senate Education Committee passed Senate Bill 2288. The legislation, co-sponsored by State Senator Michael Frerichs (D-Champaign), will help solve many of the state's budgetary problems while providing funds for education and a capital plan. The measure will reduce property taxes while increasing personal and corporate income taxes. Senate Bill 2288 would create a variety of new special funds, dedicated to funding education, higher education, capital projects, early childhood education, and property tax relief.

"This is a proposal that I pushed for before I arrived in the Senate," said Senator Frerichs. "It addresses so many of the issues that are crucial to Champaign and Vermillion counties. It provides for capital projects. It increases funding for our local school districts and for institutions like U of I, Parkland, and the Danville Area Community Colleges."

The legislation would provide $2.9 billion in tax relief for all homeowners, with a minimum 20% tax relief. The personal income tax would increase to 5% from 3% and corporate tax would increase from 4.8% to 8%. Even with the increase, Illinois would have a lower personal income tax than most of its neighbors including Iowa (8.98%), Kentucky (6.0%), Missouri (6.0%), and Wisconsin (6.75%). The legislation would provide tax credits for individuals earning less than $26,847 and married couples earning less than $53,694.

Senate Bill 2288 would also provide an additional $300 million in higher education funding. For local school districts, it would phase in increases to the foundation level, the minimum amount of funding required per student per year, from $5,734 this year to $6,974 in the 2012-2013 school year. $75 million also would be given in aid to the state's neediest school districts.

"While it is good that funding for primary and secondary education as increased in the past few years, state funding for U of I has essentially stayed level during the same period," said Senator Frerichs. "This has caused tuition to increase, which isn't good for the University or its students."

The proposed legislation would create the Invest in Illinois Fund which would receive $1 billion annually to fund capital projects throughout the state. It would create a consistent annual funding source for a desperately need capital plan.

"We haven't had a capital plan since 1999. Repairs are needed on schools, roads, and bridges that haven't been addressed in nine years," said Senator Frerichs. "We tried to pass a capital plan last year; this bill gives us a different funding option."

The chief sponsor, Senator James Meeks (D-Chicago), indicated that there were plans to use additional funds provided by this bill to pay down the pension debt and reduce the payment cycle for Medicaid payments.

"Right now many people consider Illinois a 'deadbeat' state, because it takes us a long time to pay our Medicaid bills," said Senator Frerichs. "This legislation will allow us to get our financial house in order by giving us a way to pay our Medicaid debt and make a full contribution to the pension fund."

The bill is being supported by the Illinois Federation of Teachers, Center for Tax and Budget Accountability, and the Illinois School Management Alliance.

"Similar legislation stalled last year. While this is not the final version of the bill, we are making progress by working with senators from both sides of the aisle to refine the bill," said Senator Frerichs. "My only concern is that this will turn into a Christmas tree bill. If we dilute this bill with too many add-ons and new provisions, we will lose the initial intent of the bill."

Senate Bill 2288 passed the Senate Education Committee by a 6-3-1 vote and will now await floor action.