IL Policy Institute Report on $3.5 Billion Savings “Deeply Flawed, Unrealistic”

3/8/2012

“Clever Wording Hides Harsh Outcomes”

The Illinois Policy Institute 2013 budget plan for state government is a purely political document to cut government with a deeply flawed fiscal analysis and unreal, contradictory policy proposals.

“This so called ‘Realignment with Reality’ by IPI is just another political document from a corporate think tank. The plan calls for harsh and damaging cuts to education and middle class families,” said IFT President Dan Montgomery. “The IPI’s budget plan is deeply flawed from top to bottom with often contradictory proposals. Nothing here is realistic.”

The IPI report is cleverly worded but does not contain any real solutions. It suggests state funding cuts of nearly $500 million in the PTELL Adjustment for tax capped school districts–with no replacement funding. It would treat many districts unfairly and cause dozens to face fiscal catastrophe. “Doing away with PTELL without replacement funding is not a realistic solution,” added Montgomery.

An IPI analysis of TIF funding is equally harsh and harmful. The report admits schools lose $600 million in local property tax revenues to TIFs. Then the plan calls for TIF assessed values to go back into the school aid formula. Yet it does not specifically call for TIF money to flow back to schools. “Again, it’s a clever word trick that claims the formula will fix the TIF problem. Basically, IPI fails to provide replacement money. It makes no sense to include the equalized assessed values from TIFs in the school aid formula when school districts will have no access to collecting that local revenue.”

The IFT also disagrees with IPI’s specific proposals that shift pension costs to local school districts, cut pension benefits and arbitrarily restrict salary and health care benefits negotiated by state employees.