Rauner Pushing New Pension Alternative to Restore CPS Funding

Gov. Bruce Rauner announced Friday he is backing legislation he says would save Illinois billions of dollars through structural pension reforms. (Chicago Tonight)

Facing an ongoing lawsuit brought by Chicago Public Schools and increasing calls to restore vetoed funding to the cash-strapped school district, Gov. Bruce Rauner is urging “swift action” to enact statewide pension reform in a new Republican-led bill.

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Rauner has called on state Democrats to back GOP legislation that would uncouple a pension reform bill from the so-called “grand bargain,” so that measure could be passed on its own. If that does happen, the governor has said he would sign the legislation and turn over the $215 million in state funds to CPS that he vetoed late last year.

On Friday, the governor announced he is also backing companion legislation sponsored by House Republican Leader Jim Durkin, R-Western Springs, that he says would save Illinois billions through structural pension reforms. Rauner says those savings could then be used to help fund CPS.

“If Chicago is asking for assistance from the state, we need to find a way to help the state save money and justify that assistance – otherwise it’s just a bailout,” Education Secretary Beth Purvis said in a statement. “These bills are good for taxpayers, reduce our pension liabilities and keep kids in school.”

Rauner has long claimed the CPS funding he vetoed was tied to yet-to-be-achieved statewide pension reforms. But he said this legislation would satisfy that deal by linking the same CPS funding to a statewide pension reform bill filed by Senate President John Cullerton earlier this month.

The governor's office claims this package would save the state $1 billion to $2 billion dollars per year.

But Dan Montgomery, president of the Illinois Federation of Teachers, said Rauner’s plan is based on “alternative facts.”

“The pension bill Rauner demands as a condition for funding education reflects legislation that has already been ruled unconstitutional by our Supreme Court several times,” Montgomery said in a statement.

“This new bill, which also steals from public workers’ life savings, is likely to face the same fate, and therefore, its savings amount to nothing. For Rauner to say this is ‘good policy’ suggests he doesn’t understand the law or doesn’t care.”

CPS has been at odds with the state for months over $215 million in pension funding. A 2016 agreement between the city, state lawmakers and Rauner would have sent that money from the state toward this year’s district budget.

After freezing school spending and furloughing staff to help backfill that budget gap, the district filed suit against the state, claiming its funding formula discriminates against minority students.

The district filed that suit in Cook County Chancery Court, seeking to keep Rauner and the state from distributing education funding in a “discriminatory way” and declare Illinois’ teacher pension funding system unlawful under the Civil Rights Act.

The district claims its predominantly African-American and Hispanic student population suffers from education inequalities brought on by “two separate and demonstrably unequal” public education funding systems. CPS says it receives 15 percent of the state’s education funding despite carrying about 20 percent of the students.

The district has since filed a motion stating it will end the school year nearly three weeks early in a “worst case scenario” unless the court forces the state to step in and help cover its budget gap.

The state challenges that claim in a motion to dismiss filed Friday afternoon, saying CPS has less than 20 percent of Illinois’ students, but receives 24 percent of its education funding.

In that motion, the state says that although CPS claims Illinois has not contributed enough money to the Chicago Teachers Pension Fund in recent years, that is not an issue to be dealt with by the judiciary.

A separate motion also filed Friday seeks to deny the district’s request for preliminary injunction.

“The state is not shortchanging CPS with regard to education funding,” that motion states. “And CPS and State pension funding obligations have been separate for a very long time. CPS’ immediate fiscal problems originated years ago because of decisions made by prior CPS administrations.”

Claypool on Wednesday called the governor’s claim that CPS’ fiscal woes are the city’s fault a statement of “Alice in Wonderland absurdity.”

“The State’s thin argument hinges on its claim that pensions shouldn’t be considered teachers’ compensation. This is simply preposterous," CPS spokeswoman Emily Bittner said in a statement. 

“In reality, the State admits that the numbers CPS provided the court are correct, and then begs the court to exclude the fact that Illinois makes teacher pension payments on behalf of primarily white students and then denies those same resources to Chicago’s students of color – and that’s the heart of the State’s racial discrimination.”

On Wednesday, Claypool said the judge handling the suit had agreed to an expedited schedule, but has not yet committed to issue a ruling by May 1. The district requested an answer by that date to allow parents and families to make arrangements in the event of a shortened school year.

Follow Matt Masterson on Twitter: @ByMattMasterson

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