State: Dems, GOP to talk school aid, pensions

Cullerton puts school reform out front, says pension deal hopefully near

By Mark Fitton
Illinois News Network

SPRINGFIELD — State Senate President John Cullerton, D-Chicago, dropped two big pieces of news Monday:

  • Cullerton wants a rewrite of the state’s school funding formula, and he’s linking it directly with talks about the overall state budget.
  • He and Gov. Bruce Rauner, R-Winnetka, are back on the same page regarding a pension reform bill.

Cullerton, D-Chicago, argues the state’s two-decade-old school funding formula doesn’t adequately address student needs, therefore rewarding prosperous school districts while penalizing those with higher levels of poverty.

Speaking at the City Club of Chicago, the Senate president called the school funding formula “most inequitable system of school finance in the country” and “the defining crisis of our times.”

And Cullerton made it clear it’s a big issue for him: “The governor has linked things together. We don’t have a (fiscal year 2016) budget because he’s got his Turnaround Agenda. So, I can link things together, too. This is a turnaround agenda. We’ve got to change the school funding formula.”

Cullerton argued a fair rewrite of the funding formula would ultimately benefit Chicago but would not be giving it special treatment.

He said Chicago would getting funding proportionate with its high percentage of low-income students in the same fashion as other challenged districts, such as East St. Louis or East Aurora.

And, he said, a single formula must give Chicago pension parity. That is, the state would pick up the same share of pension costs as it does for downstate districts.

Chicago, however, would lose block grants that it now qualifies for, Cullerton said.

“It’s not a special deal for Chicago; we’re eliminating the special deals,” he said.

“The amount of money we are talking about shifting is about $400 million into the poorer school districts out of about $8 billion,” he said. “It can be done in a fair way.”

The governor’s press office declined to comment on Cullerton’s remarks, but the GOP’s legislative leaders did offer emailed statements.

“Senate President Cullerton’s remarks today will strike fear in the hearts of families and schools across the state. He’s threatening the opening of schools next fall,” said Senate Republican Leader Christine Radogno of Lemont.

“The Democrat majority-controlled state government for more than ten years and ignored school funding reform — other than to create special deals for Chicago Public Schools,” she said. “The most recent proposal again advantaged Chicago at the expense of suburban school districts.”

Radogno said Senate Republicans “are willing to tackle school funding reform — but it’s not the only place in Illinois ripe for reform. We need to work together for school reform and the structural reforms that will help all of Illinois.”

Rep. Jim Durkin of Western Springs, leader of the House Republicans said, “As a suburban legislator, I remain open to working with the Democrats to fix our archaic school funding formula.”

“At the same time, I hope this means Democratic leadership is now ready to work with us on other structural reforms to put Illinoisans back to work and to bring the budget impasse to a close,” Durkin said.

House Speaker Michael Madigan’s spokesman did not a return phone message seeking comment.

Illinois is in the seventh month of fiscal year 2016 without a budget.

Rauner complains Democrats sent him a spending plan $4 billion heavier in spending than estimated revenue.

Democrats complain Rauner and the GOP have been unwilling to work with them on a plan until the governor gets movement on his own agenda items, which Democrats do not consider directly related to the annual budget.

Meanwhile, the state is said to be spending on 90 percent of its annual obligations as it funds primary and secondary education and meets expenses incurred by way of debt service, continuing appropriations and court decrees.

That spending — which does not include higher education nor many human services — is said to be running at a clip that would put Illinois as much as $6 billion in the red for fiscal 2016 if nothing changes.

Pension deal?

Speaking to reporters after his speech, Cullerton said he and Rauner had spoken Monday morning and smoothed out their differences on pension reform legislation, and that bill is now being drafted.

“I think we have an agreement,” Cullerton said. “There are some tweaks to be made by the lawyers, and then the question’s going to be, ‘How do we pass it?’”

“All these pension bills in the past that have passed have been very bipartisan and controversial, so we expect that the unions will probably not be supportive. So, that will make it more difficult to pass, but we’re going to be on the same page,” Cullerton said.

The plan reportedly focuses on giving state employees a choice. For instance, an employee who wants to keep the 3 percent, compounded cost-of-living raises payable in retirement would have to accept a lower pensionable salary. On the other hand, the employee could take the higher salary while working but get smaller cost-of-living raises while in retirement.

Backers of the Cullerton plan say it could save Illinois — which has unfunded pension liabilities of more than $111 billion — about $1 billion annually.

However, even supporters acknowledge such a plan likely would face a court challenge if passed.

The Illinois Supreme Court last year threw out a 2013 pension reform effort, saying it violated the pension protection clause of the state constitution that says membership in a public pension system is a contractual relationship, “the benefits of which shall not be diminished or impaired.”

Cullerton said he doesn’t expect opposition to the plan from Speaker Madigan, D- Chicago, who he described as “not reluctant to take on pension reform.”

“The problem is going to be many of our members are probably going to say, ‘Well, that’s OK; that’s pension reform. But what about the rest of the budget? What about all the other issues?’”

Cullerton said the pension bill he and Rauner are working on does not include diminishment of collective bargaining for state employees.

“That’s not part of the deal,” the Senate president said.

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