In an ugly special legislative session in early July, Illinois finally enacted a budget when the Legislature overrode Governor Bruce Rauner’s veto. It is the first budget the state has had since Rauner was elected governor over two years ago. But the wrangling between Republican Governor Rauner and the Democratically dominated Illinois Legislature continues. On Monday, Rauner called another special session of the Illinois Legislature—beginning today—to resolve an impasse on school funding that threatens to hold up money necessary to start the upcoming school year.
Although the majority-Democratic legislature overrode Rauner’s veto to pass the budget, school districts cannot access their state funds because the formula to determine the distribution of state funds for school districts remains blocked. The legislature has passed a new “evidence-based” school funding formula intended to equalize school funding, but, through a legal technicality, has not yet sent the budget to Rauner. Legislative leaders fear Rauner will use what Illinois calls his power of “amendatory veto.”
Parsing out what’s going on in Illinois is confusing. Here is a summary of what’s been happening and what it means.
WHAT’S WRONG WITH ILLINOIS SCHOOL FUNDING? The Education Law Center’s National Report Card on School Funding identifies Illinois as fourth from the bottom of all the states in school funding fairness. The only states that do a worse job of using state funds to compensate for notoriously uneven local capacity to raise school taxes are Nevada, Wyoming, and North Dakota. For WTTW, Chicago’s PBS station: Amanda Vinicky explains: “An over-reliance on local property taxes means that as much as $32,000 is spent on each pupil attending a school in a wealthy area, while spending on a student growing up in an area with low property values can be in the $4,500 range.”
WHAT IS THE EVIDENCE-BASED SCHOOL FUNDING PLAN? This is the substance of a new law, Senate Bill 1, passed by both houses of the Illinois Legislature but not yet signed into law by Governor Rauner. John O’Connor and Sophia Tareen, writing for the Associated Press explain: “The legislation would revise the way the schools receive state aid for the first time in two decades. The method funnels money to the neediest school districts first after ensuring that no district receives less money than last school year. That includes a $250 million-a-year grant for the financially-troubled Chicago schools for programs funded separately in other districts and a requirement that the state pick up the annual $215 million employer portion of Chicago teachers’ pensions.”
THE POLITICS Illinois is a split state with both houses of the legislature dominated by Democrats but a very conservative Republican as governor. After members of the legislature overrode Governor Rauner’s veto of a state budget that was years overdue, Rauner fired many of his key staffers and hired what Natasha Korecki at POLITICO describes as “several members of the Illinois Policy Institute, a lightning-rod conservative think tank, in their place….” The Illinois Policy Institute is so far to the right that it is a member of the State Policy Network, a group of libertarian “think-tanks” at the state level that work with the American Legislative Exchange Council to develop and promote right-to-work and school privatization legislation and distribute model bills to be introduced in legislatures across the fifty states.
WHAT IS AN “AMENDATORY VETO”? O’Connor and Tareen explain: “Illinois is one of just seven states that give its governor the power of amendatory veto. It allows a governor to return legislation with ‘specific recommendations for change.’ But according to the state Supreme Court, that does not include changing a bill’s ‘fundamental purpose’ or making ‘substantial or expansive’ changes.” Governor Rauner has threatened to use his power of amendatory veto, which is why the bill has not yet been sent to Rauner.
THE SCHOOL FUNDING BILL WAS PASSED ON MAY 31. HOW COME IT HASN’T REACHED THE GOVERNOR’S DESK? Vinicky at WTTW explains the mechanics of the delay: “Democratic Sen. Donne Trotter, D-Chicago, says given Rauner’s veto threat, he used a parliamentary procedure known as a ‘motion to reconsider’ to put a hold on the measure. That prevents the governor from killing it with his veto pen, and from signing it into law. There is no limit on how long the hold can last.”
SO WHY IS GOV. RAUNER THREATENING TO VETO AND CHANGE PART OF THE SCHOOL FUNDING PLAN? The problem is that the Legislature has allocated money to help the Chicago Public Schools (CPS), which have been teetering on the edge of bankruptcy. Chicago Public Schools is the state’s largest school district, and it serves an enormous number of children who need services due to concentrated poverty, special education programs, and programs for English language instruction. And there is a two-decades’ old pension crisis. The state contributes to the pension system for all of the state’s other school districts, but Chicago’s pension system is on its own. Earlier this week, Reuters summarized: “Escalating pension payments have led to drained reserves, debt dependency and junk bond ratings for CPS, the nation’s third-largest public school system. The governor called the CPS pension funding ‘a poison pill’ in the legislation, adding that it should be taken up separately.
Heather Cherone for Chicago’s DNA Info explains further: “Rauner again said he plans to issue an amendatory veto that would remove the $300 million the legislation would send to CPS to cover current and past-due pension payments, which amounts to a ‘bailout of Chicago’s broken teacher pension system’ that the governor’s office said would take ‘away critical resources from school districts across the state.'”
Partly due to lack of equity in the state’s funding system, the Chicago school district has depended on borrowing for years, most notoriously from its teachers’ pension fund. The teachers’ pension fund has been in crisis, and it is clear that the pension crisis is not the fault of the teachers, who have paid their individual contributions. Maureen Kelleher, writing for the Chicago Reporter, explains that it stems from 1995, when the state created mayoral control that included sweeping financial changes: “The biggest revenue shift came from combining several property tax levies—including one earmarked to pay for teacher pensions—into one fund that could be used to pay current operating expenses. That year, $62.2 million was diverted from pension payments to operating expenses.” And the school district has persistently failed to pay its full contribution to the fund and diverted pension funds for school operating expenses—basically borrowing out of the teachers’ pensions to run the district. In the summer of 2015, Kelleher concluded that unfunded liabilities in the pension fund totaled $10 billion.
The Chicago Sun-Times editorial board castigates Rauner for pitting “Chicago against the rest of Illinois”—Chicago that educates 19 percent of the states public school students while, even under the new plan, receiving “only 16 percent of the state’s funding for education.”
Sun-Times columnist Mark Brown describes the common ground achieved between school leaders and advocates in Chicago and in smaller communities downstate as the Legislature developed the plan: “They found common ground with Chicago Public Schools in developing a formula that benefits both by recognizing their shared challenges—notably high percentages of students from poor families who are more costly to educate.” Brown profiles small-town school superintendents “who have been holding town forums to explain the benefits of Senate Bill 1 to their residents,” including Rolf Sivertsen, the “superintendent of Canton Union School District 66, about 30 miles west of Peoria. His district has 2,600 students in grades pre-k through 12th. Sixty percent of these students come from low-income families. The school district would receive $760,000 more if Senate Bill 1 becomes law.”
It appears that most people in in Illinois and the legislators who represent them want to move forward with an unbiased system of funding schools, including fairness for the beleaguered Chicago Public Schools. Bruce Rauner’s ideological rigidity is blocking an equitable solution.