Illinois education funding compromise in trouble, threatening school openings

The Illinois state government missed its annual payments to schools this month for the first time in history and a compromise hammered out between the two parties may not pass the legislature this week.

The failure of the legislature to come to an agreement on a new funding formula for public schools means that it is possible that the schools will not open on time. Governor Bruce Rauner and Illinois House Speaker Michael Madigan hashed out a compromise last week, many of the details of which are still secret. But even with the prospect of shuttered schools, opposition to the deal is building on both sides.


At issue is Senate Bill 1, a measure passed by the legislature to move Illinois to an “evidence-based model” of education funding, which would take into account each district’s individual needs, as well as its local revenue sources, when appropriating state aid – prioritizing districts that are furthest from being fully-funded.

Without an evidence-based model in place, no state funding can be disbursed to K-12 schools across Illinois at all, due to a provision in the budget passed in July that makes aid contingent on an overhaul of the funding formula.

Critics of SB 1, including Rauner, have called it a “bailout” for cash-strapped Chicago Public Schools because the bill as passed took into account the district’s $505 million in unfunded pension liability, plus $221 million in its normal pension payments, as well as the $203 million Chicago Block Grant, when determining how much it should receive in state funding.

The governor's amendatory veto earlier this month made several changes to the bill that included the removal of those considerations – which would result in CPS receiving $463 million less in state aid, according to an analysis from the Illinois State Board of Education.

While specifics of Thursday’s compromise – hammered out through a series of closed-door meetings – have not yet been made public, it may include an additional $300 million to CPS above Rauner’s plan, as well as giving the state’s largest school district the authority to raise property taxes.

In exchange, changes to the way tax increment financing districts are calculated into a school’s local funding capabilities may be imminent, at Republicans’ behest, plus a potential allowance for districts to get rid of requirements, like physical education, for which the state does not provide funding.

One of the more contentious results of the negotiations is a possible tuition tax credit pilot program for which officials may earmark up to $75 million for tax credits to parents who send their children to private schools.

Rauner appears resigned to some kind of bail out for the Chicago Public Schools, despite heavy criticism that the CPS has mismanaged its finances for years. The $300 million in the funding compromise for the CPS is the absolute minimum the city needs to avoid major layoffs and classroom cutbacks later this year.

Downstate Republicans bitterly resent that money going to a school system so woefully mismanaged. It is schools in their districts that will suffer because of the bailout.

But Madigan and his allies in the Illinois House have their orders from the Cook County machine. The bailout will not only save the CPS this year, but the rejiggered funding formula will be very generous to Chicago in the future.

Rauner, who is running for re-election next year, was elected on an ambitious reform program that included reining in the unions and reforming the massive pension problems faced by the state. He has been unable to accomplish anything, despite preventing the passage of a budget for 2 years. In July, his own party turned their back on him to override his veto and approve a budget.

That he was forced to give up so much to the Democrats to get the education funding bill compromise does not bode well for his electoral chances. Republicans may feel he isn't worth putting their own political fortunes at risk and, along with teachers unions, work to defeat the compromise. 

If that happened, the resulting chaos of parents scrambling for child care so that they have someone to watch their children while they go to work could ensure that Rauner becomes a one term governor.

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