Rauner plan on pension cost could cut programs, increase property taxes

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In February, when he proposed his spending plan for the upcoming fiscal year, Governor Bruce Rauner unveiled plans to divert nearly a half-billion dollars in state government costs onto local schools and property taxpayers. Rauner’s plan would, over a four-year period, erase 100% of state government’s more than $1.2 billion annual normal pension costs by requiring local schools to harbor the expense.

On Wednesday, the Senate’s two Appropriations committees held a joint hearing to better understand the consequences of Rauner’s plan to add $500 million in new costs onto Illinois schools next year.  

A panel of Illinois school superintendents said the Rauner administration’s plan would be devastating to scores of Illinois schools who’ve just begun to realize small, but important increases in state support through last year’s school funding reform package.

Mark Cross, superintendent of Peru Elementary District #124, said the governor’s shift will mean his small district ultimately loses.

“From the reformed (school funding) formula, we’re receiving $41,000 in new state money,” Skertich told the committee. “But with the four-year cost shift, we’re going to have to spend two-and-a-half times that.”

Springfield Public Schools District #186 superintendent Jennifer Gill told the committee that the fast-paced, four-year plan to move these costs onto the district she runs will ultimately add $10 million more to the district’s annual fixed expenses. Gill also said that District #186 recently made $5 million in tough cuts and has finally found a level of measurable stability.

For Springfield, Rauner’s plan would cause immediate chaos by adding an annual $2 million increase in expenses the district can’t afford. To meet the needs of the students and community, the choices are slim – either major cutbacks in school programs, staff and teachers or try to increase local taxes.

These options were reinforced by Brad Skertich, superintendent of Southwestern Community Unit School District #9. Skertich said he’s finally felt a period of relief from crisis in budgeting this year but fears the Rauner pension diversion plan will end that stability.

“For the first time in nearly a decade, we switched from survival mode to improving the quality of education for our students,” Skertich told the committee.

He said the school funding reform was a step forward, but feared the pension cost diversion plan would be, “two steps backward.”

Danville School District #118 superintendent Alicia Geddis’ testimony reminded the Senate panel of the various demands beyond teaching that are often placed on schools. And even after $14 million in state aid losses over the years, failure to have the community support added taxes and the anticipated 42 vacancies for next school year, Geddis said her schools are trying their best to stitch a social service safety net for her area.

“District #118 is the second largest mental health provider in Vermilion county,” Geddis said.

The costs associated with services like suicide prevention or other mental health ailments aren’t necessarily something she can anticipate. And, with popularity of austerity in social services, the new cost of picking up the spending for pensions will be a $3 million hit.