Continuing to push for his vision of pension reform, Gov. Bruce Rauner issued an amendatory veto against Illinois school funding bill Senate Bill 1 on Tuesday, sending it back to the Illinois General Assembly, where if lawmakers uphold his changes, the state’s education funding will achieve a “historic” reform, Rauner said.

In mid-July, the Chicago Public Schools (CPS) issued a statement, claiming Rauner couldn’t legally veto SB 1, citing that his amendatory veto “exceeds the power of the Governor under the State Constitution.”

Compared to the current bill, Rauner’s version would cause CPS to lose $203 million, according to calculations from his office.

“As written, Senate Bill 1 places the burden of the Chicago Public Schools’ broken teacher pension system on our rural and suburban school districts through three major provisions: pick-up of CPS’ normal pension costs, retention of the so-called Chicago block grant, and a deduction for the CPS unfunded pension liability,” Rauner said in his veto letter. “Taken together, these three provisions put Chicago in line for millions more in funding that are diverted from other, needier districts, thus going against the Commission recommendation that any additional money be distributed first to districts farthest from adequacy. This is not about taking resources away from Chicago. This is about making historic changes to help poor children in Chicago and throughout the state of Illinois.”

In his amendatory veto, the Governor asks the General Assembly to make the following changes to the bill:

• Maintain a per-district hold harmless until the 2020-2021 school year, and then move to a per-pupil hold harmless based on a three-year rolling average of enrollment.

• Remove the minimum funding requirement. While the governor is committed to ensuring that the legislature satisfies its duty to fund schools, the proposed trigger of 1% of the overall adequacy target plus $93 million artificially inflates the minimum funding number and jeopardizes Tier II funding.

• Remove the Chicago block grant from the funding formula.

• Remove both CPS pension considerations from the formula: the normal cost pick-up and the unfunded liability deduction.

• Reintegrate the normal cost pick-up for CPS into the Pension Code, and treat Chicago like all other districts with regards to the state’s relationship with its teachers’ pensions.

• Eliminate the PTELL and TIF equalized assessed value subsidies that allow districts to continue underreporting property wealth.

• Remove the escalators throughout the bill that automatically increase costs.

• Retain the floor for the regionalization factor, for the purposes of equity, and adds a cap, for the purposes of adequacy.

The amendatory veto also removes the accounting for future pension cost shifts to districts in the Adequacy Target, preventing districts from taking full responsibility for the normal costs of their teachers’ pensions.

“These changes included in my amendatory veto reflect years of hard work by our education reform commission and our ability to overcome our political differences for the good of our young people’s futures,” Rauner said. “I urge the General Assembly to act quickly to accept these changes and let our students start school on time.”

Initially passed by both the Illinois Senate and House of Representatives in May, SB 1 seeks to increase state funding in order to properly fund each of the state’s 850-plus school districts.

This would be done by increasing the state funding over time after taking into account each district’s local funding capacity and the amount of state funding it already receives as a baseline. Funding goals are then set based on the “essential elements” of each district, as well as their respective costs of implementation based on demographics and regionally variated staff salaries.  

Tags: Governor Bruce Rauner, Illinois, Pension, Senate Bill 1, Teachers