Some, but not all, lawmakers are headed to Springfield Wednesday after Gov. Bruce Rauner called a special session on school funding this week.
The education funding battle has taken center stage in Illinois politics this week, with pressure mounting on several fronts for the governor and state lawmakers. The outcome of the special session could determine whether or not schools will open on time this fall.
At least two state representatives have said they plan to boycott the special session.
State Reps. Kelly Cassidy and Ann Williams will not be among the lawmakers heading back to Springfield Wednesday, the Chicago Democrats announced in a release, saying they “reject” the “political stunt.”
Instead, they plan to hold a service day painting classrooms at Gale Community Academy, a Chicago Public School on the city’s North Side.
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nPerhaps the most widely-discussed change is an increase in the state income tax. The hike will permanently increase the personal income tax rate by 32 percent, from 3.75 percent to 4.95 percent, while the corporate tax rate will go from 5.25 percent to 7 percent. Both increases are similar to a tax proposal that passed the Illinois Senate in May, and are projected to raise roughly $5 billion in revenue at a time when the state has a $6.2 billion annual deficit and a $14.7 billion backlog of overdue bills. A preliminary estimate found that a family with a combined income of $100,000 a year would pay about $1,100 more annually. Another estimate claims that a family of three, with an income of $75,000 a year would pay about $822 annually.
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nIf no budget was in place, K-12 schools would not have received any state funding and likely would have been unable to open in the fall. Schools have been receiving some form of state funding up to this point because they were fully funded over the last two years, through the stopgap budget passed in 2016, as well as individual appropriations the year before. Education appropriations ended at the close of the fiscal year on June 30, but now local schools will continue to receive state aid – with one condition. The spending plan contains a provision that makes funds contingent on an “evidence-based model” to change the school funding formula, akin to a bill passed in May that Rauner has vowed to veto, calling it a “bailout” for Chicago Public Schools.
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nHigher education will get much-needed relief. The stop-gap budget passed in 2016 funded state universities through the first half of the 2017 fiscal year, meaning colleges across Illinois received no state aid beginning Jan. 1. The budget not only appropriates money for schools like Governor’s State, Chicago State and Northeastern Illinois - which have all been hit particularly hard by the impasse – for FY18, it also moves to back pay state universities for the six months of missed funding. However, the caveat is that higher education funding was cut by 10 percent across the board as part of Democrats’ acquiescence to Republican lawmakers’ requests for spending cuts during negotiations.
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nThat FY17 funding will allow colleges to pay themselves back for grants many of them gave students – anticipating eventual reimbursement from the state – in lieu of the Monetary Award Program funding that was suspended for the 2017 to 2018 academic year. Roughly 130,000 Illinois students qualify for the need-based aid financial aid, which will restored in the event that the House votes to override the vetoes.
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nRoad construction will continue after warnings statewide projects would be shut down without a budget.
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nStruggling social service agencies will be paid. Earlier this month, a patchwork of court orders and consent decrees dictatedthat the state pay certain suppliers, though Illinois Comptroller Susana Mendoza has warned that her office is required to pay out more than it receives in revenue each month. Mendoza’s office will be forced to continue to make those payments (though many of them are late and not in full), meaning the bill backlog that already sits around $15 billion would continue to pile up. By August, Mendoza has said the state will likely not have enough money to cover even those payments it is legally required to make, forcing a tough choice that could see state employee paychecks halted, or a missed pension payment.
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nTwo agencies have already given Illinois an extension after Sunday night's House votes, which was the first to pass the budget plan. But Moody's Investors Service has since put Illinois under review for a downgrade even if lawmakers override Rauner's veto. The agency said that while lawmakers have made progress, the package does not address the state's massively underfunded pensions or do enough to pay down bills.
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nAfter the budget impasse forced the Illinois Lottery to change its payment policy, the new plan would allow for winners to get paid in full.
The clock is ticking to make a decision on the matter, however. The first checks from the state are expected to go out to schools Aug. 10 and if lawmakers can't agree on a school funding plan, many schools may not be able to open on time.
Rauner released a new online campaign ad Tuesday, calling on his wife to offer testimony on his education record.
"It's about doing what's right, not what's easy,” Diana Rauner says in the new ad, running just one day after the governor called lawmakers back to the Capitol in a battle over the state’s schools.
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State aid for K-12 schools is contingent on changing Illinois’ funding formula to an "evidence-based model" like that of Senate Bill 1, which passed the legislature in May.
It is currently being held on a procedural motion, as Democratic lawmakers seek more time to negotiate after Rauner vowed to veto the measure, decrying it as a "bailout" for Chicago Public Schools.
However, Rauner said Monday that he would be unwilling to meet with legislative leaders until SB 1 is on his desk, claiming “there is nothing to discuss” and Democrats “want a crisis.”
Democratic Speaker of the House Mike Madigan took issue with that, issuing a statement Tuesday that pointed fingers at Rauner for “continuing to create a crisis that pits one child against another.”
“The governor knows very well that the education funding reform bill in question is not in the House, and members of the House cannot take positive action on the governor’s call until it is in our chamber, especially as he refuses to even detail the changes he would like,” Madigan’s statement continued.
“Governor Rauner, however, can take action. Instead of simply paying lip service to how desperately Illinois’ schools, educators, students and property taxpayers need education funding reform, he can put aside his veto threats and sign a bill he is on record as supporting 90 percent of,” he added.
“Instead of playing political games with our children’s education, he can agree to sign a bill that fixes one the most inequitable funding formulas in the country. I urge the governor to stand with us in choosing reform over a status quo that is failing our students.” [[419186634, C]]
At issue is the way the bill factors CPS’ finances into what would become the new statewide funding formula. Chicago Mayor Rahm Emanuel met with both Madigan and Senate President John Cullerton Monday as he continued his calls for Rauner to sign the legislation.
"My view is do what's right," Emanuel said Tuesday. "I know for a fact the old Bruce Rauner – before there was this coup in his office – supported, by saying he agrees with 90 percent of the funding in education, 90 percent of what's in this bill," he added.
In the midst of his major staff overhaul – over the course of which nearly two dozen staffers have resigned or been fired – the Republican governor is hoping to rally his own party behind him.
Early Thursday, Rauner will meet with legislators in the first-ever joint House and Senate GOP caucus, no doubt looking to see where they stand.
“Sometimes we need fresh troops to engage in the battle and that's what we've done. It signals no shift or change in my views," Rauner said Monday when asked about the changes in his office.
He’s imposed a deadline on education funding reform of July 31, as schools across Illinois will be looking for the first general state aid payment by August 10.
