CHICAGO – Illinois Gov. Bruce Rauner pressed Democrats on Friday to get behind state pension legislation that would provide Chicago Public Schools with $215 million in aid it needs to avert an early end to the school year.
"Now we finally have a pension reform package that everyone can agree on so now we can move forward," Rauner said at a news conference. "We can get CPS the $215 million they've requested this year so they do not have to have a crisis. They do not have to close early and we can save taxpayers across the state of Illinois a billion dollars per year."
Rauner's push followed the announcement by House Minority Leader Jim Durkin that he has the support of 26 of the House's 51 Republicans for the bills that mirror Republican-sponsored pension legislation in the Senate.
House Speaker Michael Madigan, D-Chicago, would need to provide 34 votes. Democrats hold 67 seats. Madigan did not issue a comment Friday.
The Republican governor's pleas fell flat with at least Senate Democrats.
The Senate's bipartisan "Grand Bargain" package aimed at breaking a 21-month-old budget impasse includes the state pension changes, but includes permanent help for CPS to cover its teachers' pension payment, similar to what the state provides other districts.
With the "Grand Bargain" stalled over disagreements about a local government property tax freeze and worker's compensation changes, two GOP senators, Michael Connelly of Naperville and Jil Tracy of Quincy, earlier this month broke out the pension reforms into separate legislation.
Their bill offers CPS only one year of pension help. Officials from CPS and Chicago and legislative Democrats balked at the limited help.
Rauner sought to cast off those criticisms on Friday, focusing instead of how the proposal mirrors what Chicago and state leaders agreed to in June as part of a stopgap budget. Unable to bridge their differences on a long-term agreement, the parties signed off on a package that funded state government through 2016 and provided CPS with $215 million in fiscal 2017 on the condition that lawmakers pass the state pension changes.
A remark from Senate President John Cullerton, D-Chicago, in December that the two were not necessarily linked prompted Rauner to veto the bill.
"Now we are in a position to accomplish, complete the agreement we came to….last June," Rauner said Friday, urging CPS and Democrats not to "move the goalpost."
He said passage would help spur more support for the "Grand Bargain."
"I would say honoring what we agreed to in June sets the foundation to get a broader Senate bargain," he said.
Long-term help for CPS would be included a fuller budget compromise, but Rauner also warned that CPS stands to lose $250 million in grant block funding that it's long received to offset the lack of state pension help.
Cullerton spokesman John Patterson said Senate Democrats have "moved on to solving bigger problems" since the June agreement and will continue to work on passing the "Grand Bargain."
"We've twice been poised to address pension reform only to have the governor pull support from the plans. As we head into another session week, the Senate President remains optimistic that we can pull our deal together because the fact remains that the governor is relying on the Senate to balance his budget plan," Patterson said.
CPS on Friday dismissed Rauner's pressure to support the proposal.
"Gov. Rauner continues to follow the Donald Trump playbook, diverting attention from his immoral racial discrimination against nearly 400,000 children of color at CPS," said a statement from Forrest Claypool, the school district's chief executive. "Gov. Rauner continues to fund schools in the predominately white portion of Illinois while providing CPS students, who are 90 percent of color, with $500 million less than their enrollment dictates."
The junk-rated district relies heavily on cash flow borrowing to stay afloat and has warned that without additional state help or swift court action on its lawsuit charging the state with discriminatory funding practices it will have to close schools early.
The district owes its teachers' retirement fund $700 million in late June.
The pension legislation lays out a series of changes with the cornerstone being a choice offered to employees hired before 2011 to forgo compounded cost of living increases. In exchange, salary increases would continue to count toward their pensionable salary upon retirement. If they decline the offer, future pay raises won't count toward their pensionable income.
It would apply to four of the state's five pension funds, with the judges' fund left out, and also include the Chicago teachers' fund. It would also create a voluntary tier 3 hybrid defined benefit/defined contribution plan for new employees in three of the state' five funds.
Savings are estimated at more than $1 billion.
"This is a significant step towards achieving a balanced budget but also saving our pension systems," said Durkin, the House minority leader..
Public employee unions have said they would challenge such changes in court, arguing they would violate the state constitution's stringent pension benefit protections. The cash-strapped state owes $8.8 billion to the state's five pension funds in fiscal 2018 and is saddled with $126.5 billion of unfunded obligations to a system just 39.2% funded.
