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Rauner’s veto puts schools in jeopardy

8/11/2017
The Illinois Senate and House passed a school funding reform law called Senate Bill 1. This bill does much to remedy one of the worst failings of our state — the unfair and inequitable method used to fund Illinois public schools.

However, last week, Governor Rauner vetoed that bill because he ‘only agrees with 90 percent of it.' This means districts will not receive state money before classes begin.

It’s time we stop Governor Rauner from playing politics with our schools and our children. Read IFT's response to Governor's veto of school funding bill.

CALL 217.733.5010 NOW to encourage your State Senator and State Representative to fund our schools and override the Governor’s veto of SB1.

How does the governor’s veto of SB1 hurt school district funding in the long term?

  • Eliminates inflation indexing of costs in SB1. SB1 calculates how much money a school district needs to educate a student based on a variety of factors. Many of those factors have been assigned a set dollar amount of money per student in the bill. Not accounting for inflation, those values will essentially be reduced over time. This will result in funding cuts to school districts.

  • Changes the "hold harmless" provisions from per district to per pupil in the 2020-2021 school year. That may not sound like a big change, but for school districts that have declining student populations, it means they will see less funding even if they are already far from being adequately funded by the state. 

  • Includes TIF districts and PTELL in the properties in the calculation of school districts’ ability to raise money. Tax Increment Financing (TIF) districts and Property Tax Extension Law Limits (PTELL) are mechanisms commonly used by municipalities and counties to hold taxes down. In TIF districts, taxes are frozen for a specified period of time, typically to encourage development. PTELL provisions prevent property taxes from rising more than 5 percent or the Consumer Price Index, whichever is lower. Both PTELL and TIF therefore limit the amount of property tax that can flow to school districts. Rauner’s amendatory veto demands that the state ignore those limits, and treat school districts as though they’re receiving the full equalized assessed value of all property, even property inside TIF districts or under PTELL. This means that districts will lose state education dollars and be forced to raise taxes locally to maintain the status quo. 

  • Moves the Chicago Public Schools (CPS) pension adjustment out of SB1 and into the pension law. Under SB1, all school district’s pension payments were treated the same way. The state would pick up the normal (current) cost of pensions, including CPS who currently pay for their own pensions, but keep CPS responsible for its legacy (unfunded liability) pension costs. SB1 did recognize that CPS can’t spend the same tax dollar twice, once for legacy pension costs and again in the classroom, so those legacy costs were cut from the calculation of what CPS could raise through taxes, but did not give CPS any money for those costs. This also protected the funding of every other school district if the state were to make them responsible for their own pension costs, as has been considered in recent years with the state’s financial difficulties. The governor’s veto essentially takes money from the classrooms in CPS to pay for pension costs and will do the same for all other districts should they become responsible for their own pensions.

  • Caps regional wage differences. SB1 put in a cost adjustment calculation to account for regional differences in salaries when calculating the amount of money needed to educate a student. SB1 has a floor for this adjustment to ensure downstate districts with low costs of living could compete with and retain high-quality teachers without wealthier districts outbidding them. The Governor’s veto also adds a ceiling to this adjustment, meaning that districts with higher costs of living are penalized by artificially decreasing salaries.   


School voucher program
In the closed-door negotiations surrounding Rauner’s veto of SB1, Republican and Democrat lawmakers are discussing a new $100 million school voucher program. Under the draft proposal, individual taxpayers could choose to send up to $1 million annually to scholarship organizations rather than to the state Department of Revenue. Those diverted taxpayer dollars would fund scholarships to pay tuition cost at private or parochial schools, or to pay the cost for a public school education in a district outside of a child’s community. 

Overall, the state could dole out $100 million annually in tax credits to finance this scholarship program. If the scholarship fund attracts at least $90 million in donations in any year, it would grow to $125 million. It could continue to grow by 25 percent annually, with no cap, as long as taxpayers send at least 90 percent of the maximum allowed to the fund. Donors could direct their money to a specific school, rather than a specific student, and some eligible students could be turned away.


What can I do?
Schools can’t receive state aid payments until a new funding plan becomes law. The most equitable plan, which treats all schools fairly, is SB1. In order for Illinois to move forward lawmakers must override the governor's amendatory veto. 

Please call 217.733.5010 to encourage your State Senator and State Representative to fund our schools by voting to override the Governor’s veto of SB 1. Also, ask them to reject any form of a school voucher program that would further starve public schools.


What happens next?
The Senate returns Sunday, August 13 to vote on SB 1947, a bill reflective of the Governor's amendatory veto (AV). After hearing concerns voiced by legislators, superintendents, and other supporters of public education earlier this week, it is anticipated that SB 1947 will fail.With the failure of the SB 1947, it’s likely that a motion to override the Governor’s veto of SB 1 will be filed and that a vote may pass largely along party lines. 

If the Senate overrides the AV, the House has 15 days to act or the bill dies. The House is scheduled to return to Springfield on Wednesday, August 16. With the gravity of the situation, it’s expected that the House could be in session several days grappling with their own version of a resolution. Due to the political make-up of the Illinois House, an AV override in the House is unlikely. Though an override could potentially occur with basic modifications to SB 1 in the form of a trailer bill. 


Will my school open on time?
Probably. School districts should have some cash on hand to start school. However, some districts have said that they only have enough to last until around Thanksgiving, and some are struggling to the point where they are already limiting payments to payroll, electricity, water, and other costs needed to keep the school open, and are not purchasing items like pens, paper, or workbooks.

The Illinois School Code calls for the first payment of the year on August 10 and the second one on August 20. That means that those first two payments will likely be missed while the General Assembly attempts to override or concur with the veto. Thankfully, Comptroller Susana Mendoza was able to deliver $429 million in delayed Mandated Categorical payments to districts the beginning of August.

It is unclear if or how the state will handle the missed General State Aid payments. They could make them as soon as an evidence-based model is passed into law or pro-rate the missed payments into the remaining payments for the year. Complicating matters is that the comptroller can’t write checks first for the districts that are struggling the worst. All of the school districts must be paid at the same time, which also means that the state has to have the cash on hand to pay all the schools at once.


I’ve heard my school district will get more money from the governor’s veto. Others say we’ll get less. Who’s right?
That’s hard to say, because the Illinois State Board of Education (ISBE) has not yet calculated how much school districts will receive under the model created by the Governor’s veto. The Governor's changes will likely cost every school district money in the long term.

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