Earlier today, Governor Rauner gave his Budget Address at the Capitol in Springfield. In his address, Governor Rauner touted the new education funding formula as his top accomplishment. Last year’s negotiated, bi-partisan agreement that led to the historic passage of the new funding system requires the state to contribute an additional $350 million each year to put our state on the path to adequately fund its schools. And while the Governor did propose an additional $350 million for the Evidence-Based funding system in next year’s budget, his newest proposal moves in the wrong direction by seeking to undo critical parts of that bipartisan agreement.
The Governor proposed the concept of shifting some teacher pension costs from the state to local school districts. There’s a right way and a wrong way to accomplish it, and the Governor’s proposal isn’t the right way.
The gist of the cost shift is this: right now, school districts pay less than one percent of payroll to teacher pensions and the state picks up the rest of the employer costs. That’s not an equitable way to get state funds to schools, because the richest districts with the highest paid teachers get a greater state subsidy.
Last year, the legislature passed a new “Tier 3” pension bill that includes a cost shift for newly hired teachers. The Governor’s proposal would speed up the shift for everyone, pushing $490 million in new costs down to districts. That’s $490 million today that goes towards educating our children that districts would spend instead on teacher’s pensions.
The historic school funding law passed last year includes a hold harmless. By definition, that means if we don’t invest more money, nothing changes and we continue living with a massively underfunded school system. The model depends on $350 million more each year. Not +$350 and minus $490.
Any pension cost shift must be fair, equitable, and gradual; it must invest more resources in Illinois schools and honor the promise of pensions that was made to our teachers and retirees. It should not disproportionately target high-poverty schools or undo the bipartisan equitable funding formula.