Gov. Bruce Rauner’s recently proposed $37.6 billion spending plan hit all the high notes that fiscal conservatives, including us, like to hear.
Rolling back the unpopular state income tax hike? We’re in. A rare balanced budget, and school districts held accountable when they irresponsibly inflate pension costs? Good. Ditto for increasing education funding without increasing taxes.
It’s also hard to argue with this goal: “Our guiding principle is this: Only spend money we have, and don’t increase the tax burden on the people of Illinois.”
Unfortunately, the latter appears to be what will happen if lawmakers endorse a component of the spending plan to shift the burden for public school pension contributions to local school districts. Educators warn the shift will almost certainly mean cuts for downstate schools, higher property taxes, or more likely, a combination of the two.
That’s why when the pension cost-shift was first proposed by Chicago Democratic leaders five years ago, downstate Democrats and Republicans joined together to oppose it. The good news is that the local pension cost-shift continues to be unpopular with many in Springfield.
The governor maintains that phasing the plan in over four years and providing new money for schools will offset the cost. And he also promises some as-yet unidentified tools to help poor districts make the transition.
Bloomington District 87 Superintendent Barry Reilly has said it "would be devastating to try to take that on (in) that short amount of time," adding the cost shift over four years would be more than $6 million for his district, not including future costs after that.
McLean County Unit 5 Superintendent Mark Daniel said the pension shift could mean "as much as $1.5 million in additional expenses for Unit 5 in the first year alone."
Educators also are right to worry that the cost-shift could undo much of the good accomplished in the hard-fought funding overhaul designed to reduce the largest school funding gap between rich and poor districts in the nation.
But even before reform was given a chance to work, the pension plan could result in poorer districts being forced to transfer scarce dollars needed in the classroom to cover pension liabilities.
Also worrisome is that Rauner's budget calls for shifting both pension and health care costs to public universities, including we presume, those still struggling to recover from the crippling cuts and declining enrollment that resulted from a three-year budget stalemate.
The governor says his plan will help schools at all levels absorb the blow. We’re anxious to see how his plan can actually benefit K-12 public schools, property taxpayers, and state universities.
The governor was right about one thing — if Illinois doesn't "change the way we manage pension costs and group health expenses ... our finances will continue to deteriorate, our economy will remain sluggish and our tax burdens will stay high and keep rising.”
But if we try to fix what’s broken by shifting those costs to local taxpayers, it will add to the crippling property tax burden that has homeowners moving to Iowa and other neighboring states.