BLOOMINGTON — Under the budget plan announced by Gov. Bruce Rauner on Wednesday, school districts and public community colleges and universities would have to pick up pension costs currently covered by the state.
It's an idea that's been discussed in various forms for a few years, so it wasn't entirely a surprise.
Under Rauner's plan, the pension shift would be phased in incrementally over four years.
"That is a lot faster than they had been talking about in the past," said Bloomington District 87 Superintendent Barry Reilly. "That would be devastating to try to take that on that short amount of time."
Reilly said 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."
"To make this possible, it would be advisable to create a pension shift over 10 years instead of four," said Daniel.
Neither Illinois State University nor Heartland Community College had figures immediately available on what the impact of the cost shift would be.
Universities also would have to pick up their health care costs.
Rauner said this would be offset by an additional $205 million in appropriations in fiscal 2019 and other “tools.”
But Reilly said he hasn't seen what those tools would be and whether it would be enough to offset the added cost.
“That's essentially a cut in our appropriations,” said ISU President Larry Dietz. “It wasn't any of the universities that put the pension system in place; it was the state.”
Both Dietz and Heartland President Rob Widmer noted it is still early in the budget process.
“The odds of any governor's budget proposal being the final product is not how it works,” said Widmer.
If a shift in pension costs is approved, he said, “certainly the longer we would have to cope and adjust, the better.”
Rauner said, “Our administration is an emphatic advocate for education investment.”
He said the structural reforms included in his proposal would enable the state “to spend a record $8.3 billion on pre-K-12 education. That includes $350 million of new money distributed through our more equitable funding formula.”
There was some good news for public colleges and universities in Rauner's remarks.
Calling for making higher education a priority, Rauner said, “This year we bring an end to budget reductions for our university and community college systems.”
The state's Monetary Award Program, which provides grants to college students based on financial need, would be funded at fiscal 2018 levels, with an eye toward increased funding in the future, Rauner said.
Rauner's budget calls for adding $100 million in capital funds to address deferred maintenance on college campuses.
Dietz said ISU has a backlog of about $500 million in deferred maintenance.
Political observers see Rauner's proposal as a starting point.
“We obviously care about the dollar amount, but stability of funding and a dollar amount we could plan around would take some of the anxiety out,” Dietz said.
Both Dietz and Widmer expressed hope that a budget agreement is reached before the fiscal year begins, rather than more delayed or partial year budgets.