Sen. James Meeks (D-Chicago) has been making the case that the current discussion of an income tax increase in Springfield presents Illinois with a "now or never” opportunity to reform the school funding formula. Here's one indication that lawmakers are considering the idea: Meeks' SB 750 is among a handful of bills that were granted a third-reading extension (through April 30) by the leadership.

The details of the current version have yet to be worked out. But based on previous iterations, the plan would do the following: Increase the income tax rate up from 3 to 5 percent, expand the sales tax base to include services, and issue targeted tax relief to property owners and low- and middle-income households. The Center for Tax and Budget Accountability's Ralph Martire has pointed out that services remain exempt from the sales tax in Illinois despite the fact that they generate five times more economic activity here than taxable goods. "You cannot leave the largest and fastest growing segment of your economy out of your tax base and balance your budget," Martire explained at a forum hosted by the Comunity Renewal Society last weekend. Watch him detail some of the provisions included in SB 750:

Overall, the state would stand to gain an estimated $3 billion a year from such a plan -- two-thirds of which would help close the education funding gap and $1 billion more to reimburse special education programs. That would go a long way, pulling the state from the bottom of the heap in terms of state school funding to seventh in the nation. 

With the state's finances so bleak, it's expected that the extra revenue would at first be eaten up by outstanding bills and then pension obligations, Martire tells us. But 18 to 24 months out, around the time the stimulus is exhausted, the money would actually begin trickling into schools. "This is a long-term investment," Martire tells us. "A couple of years after the funding is in place, class sizes will be reduced, we'll get more quality teachers, longer school days and children will finally start getting a competitive education." Here are more of his comments from last weekend on Illinois' unfair school funding system:

For years, Martire and Meeks have warned that the state's tax structure is unsustainable. By passing SB 750, they think Illinois can finally start fulfilling its financial obligations while also narrowing the inequities in our public education system and lessening the tax burden on low- and moderate-income households. And their are two factors working in their favor: 1) Gov. Quinn's budget proposal is dead in the water, and 2) a lawsuit is making its way through the Cook County courts alleging that the school funding system represents a violation of the state's civil rights law.  This is one to watch.