Illinois state lawmakers are attempting to force Illinois taxpayers to bail out Chicago Public Schools, or CPS, yet again.
Several legislators have sponsored a new education finance reform bill that requires the state to adopt a failed “evidence-based” funding program. Embedded in that bill is an annual $140 million pension bailout of CPS.
Not only that, but the bill also gives CPS another carveout from the proposed “evidence-based” model. Not surprisingly, this comes at the expense of all other Illinois school districts.
Chicago’s school district has gotten itself into a financial mess after decades of mismanagement, skipped pension payments, irresponsible borrowing and unaffordable teachers contracts.
District officials’ actions have earned CPS a junk credit rating and resulted in massive borrowing costs and years of budget crises.
But rather than enact financial and management reform the district needs, city and district officials have instead been using the current budget impasse to demand a pension bailout from the state.
Their excuse for the bailout is simple: The state pays the pension costs of every school district in Illinois except CPS. But that argument is wrong. It ignores the fact that Chicago already gets special school funding deals – such as an annual “block grant” – that no other school district receives.
Lawmakers in Springfield have given in to Chicago’s demands for more state dollars. Every version of the Senate’s “grand bargain” so far has included a multimillion-dollar bailout of CPS.
But since the grand bargain has stalled, politicians have attached the bailout to a new proposal on education finance reform.
State Rep. William Davis, D-Homewood, has introduced House Bill 2808, a bill that forces the state to use an “evidence-based” program to fund education.
The Illinois Policy Institute has written about how “evidence-based” funding doesn’t work, and how it would cost taxpayers an additional $3.5 billion to $6 billion a year.
The CPS bailout would only add to that new burden on taxpayers.
The bill requires the state to pay the normal cost – meaning the annual pension benefit earned by teachers for working one more year – of Chicago teachers pensions going forward.
That would cost Illinois taxpayers an additional $140 million a year.
And the bill doesn’t just help Chicago by bailing out its teachers pension fund.
It creates yet another carveout from the “evidence-based” funding proposal. While all other districts’ funding is subject to the “evidence-based” model, Chicago gets to keep its special “block grant” funding.
Don’t bail out CPS, end pension subsidies
A CPS bailout is the exact opposite of sound policy.
Rather than pay CPS’ pensions, the state should stop paying for the pensions of Illinois’ school districts.
Teachers are not state employees. The responsibility for paying the employer’s pension contribution for teachers should be shifted back where it belongs – local school districts.
Under current law, districts dole out higher pay, end-of-career salary hikes, and perks that spike pensions, knowing the state pays the pension costs. Districts will only moderate the benefits they offer when they are required to bear their own pension costs.
And CPS needs to enact financial and management reforms it has avoided for decades. The district can rein in spending, renegotiate contracts to provide affordable levels of employee compensation, and finally consolidate its schools and administration to reduce operational costs.
