Illinois Governor Pat Quinn is planning to shift some pension costs away from the state to school systems. This comes amidst negotiations over a package to help ease Illinois’ $83 billion pension crisis. Figures from the State Board of Education suggest that over 50% of Illinois’ school districts have more than a year’s operating funds on hand.
“The bottom line is school districts can certainly afford to have a stake in the contracts they negotiate, and overall the numbers make it clear there is no excuse not to do pension reform and do it quickly,” Quinn spokeswoman Brooke Anderson said.
Until now the state has footed the pension bill entirely for suburban and downstate school systems. The proposed changes would bring these districts into line with Chicago school systems.
The new data showed that 478 out of 864 school districts across the state carried cash reserves as of June 30, 2011, that would fund at least 180 days of operating expenses — the equivalent of a full school year.
House Majority Leader Barbara Flynn Currie is in favoPr of all school systems in the state joining Chicago schools and paying for educator pensions. She said it was only fair the districts which make the contracts share the responsibility to pay them, while the figures clearly showed the districts could afford for the additional financial costs to be phased in slowly.
The State Board of Education, however, disagrees. It says the figures are dated and don’t properly represent the districts’ ability to pay.
“A point-in-time measure from one year ago can’t be used as a measure of any district’s wherewithal or ability to sustain an ongoing liability,” said Mary Fergus, a spokeswoman for the State Board of Education. “These figures do not account for rising expenses, declining local revenue or a district’s long-term plans for these funds.”
Contrary to the idea that the changes would be easily affordable, the State Board of Education claims that they would actually leave 128 of the state’s school systems broke by June.
Republican legislators are also wary of the proposed changes fearing that if, as the Board of Education claims, districts are unable to absorb the cost, then the proposals will lead to widespread property tax increases.
The non-partisan Pew Center has just released a report on the States which shows Illinois has once again gained the dubious distinction of having the worst-funded pension systems in the country. Pension negotiations in Illinois are due to resume June 21.