State Finds New Source to Fund Regional School Superintendents

November 17, 2011

The State of Illinois’ 44 regional school superintendents’ offices, which were slated for elimination in Governor Pat Quinn’s FY2012 budget recommendation, have been granted a reprieve—at least for one year.

In presenting his proposed FY2012 budget to the General Assembly on February 16, 2011, the Governor stated that he was eliminating state funding for the offices in order to spend more in the classroom. The proposed cut involved approximately $13 million for the superintendents’ salaries and office costs.

Regional superintendents argued that they performed necessary duties including inspecting schools, training bus drivers and certifying teachers.

The budget passed by the General Assembly included funding for the superintendents’ offices. However, Governor Quinn in June 2011 vetoed general operating appropriations for regional superintendents and assistant regional superintendents and stated that they should be paid from other state funds.

During the veto session in November 2011, the General Assembly passed a bill to pay the administrators’ salaries during FY2012 from the Personal Property Replacement Tax (PPRT) Fund. The Governor signed Public Act 97-0619 on November 14, 2011. The legislation also establishes the Streamlining Illinois’ Regional Offices of Education Commission, which is charged with examining the duties of the State Board of Education and the regional offices to see whether regional offices can be consolidated. The 14-member Commission is required to report to the Governor and General Assembly by August 1, 2012.

As discussed here, the PPRT is a revenue source for local governments that was created by the General Assembly in 1979 to replace a tax on the personal property of businesses that was abolished pursuant to the 1970 Illinois Constitution Article IX Section 5. Although its name refers to the tax it replaces, the PPRT is an income tax on the federal taxable income of corporations, business partnerships, trusts and Subchapter S corporations and a tax on public utilities.

Before being distributed to local governments, money is diverted from the PPRT Fund to pay expenses of the Property Tax Appeal Board. Public Act 97-0072, enacted in June 2011, also authorizes payment of stipends for certain local government employees, including county assessment officials and assistant state’s attorneys, out of PPRT collections. According to the Illinois Municipal League, municipal governments receive 20% of remaining PPRT revenues, schools receive 60% and other local governments receive 20%.

The Municipal League opposed the use of PPRT revenue to fund regional school administrators. Even though the amount of funding is not substantial, the League expressed concern that the State will increasingly divert revenues from local governments.

In FY2011 the PPRT Fund received revenues of $1.5 billion, according to data available on the Illinois Comptroller’s website. The website of the Illinois Department of Revenue provides data on the allocation of PPRT revenues among local governments.