* It’s no surprise that the Illinois Policy Institute hates Speaker Madigan’s proposed 3 percent tax surcharge on incomes above a million dollars. But the group has connected the dots to the Chicago Public Schools’ pension problems. The proposal would distributes the billion dollars in projected revenues equally to school districts based on student headcount. Since CPS has the most students, it gets the most money, which the Policy Institute claims is basically just a “Chicago bailout”…
It just so happens that [Madigan’s] home school district is suffering from a collapsing pension fund and pension contributions that are set to triple in 2014.
Chicago Public Schools’ pension contribution spiked to $613 million in 2014, up from $208 million in 2013, and CPS doesn’t have the money to pay for it.
But rather than call for sensible pension reforms, Madigan would rather pour more state tax dollars into CPS’s pensions.
Nearly 20 percent of Madigan’s proposed tax, or $200 million per year, would go to CPS. With nearly 400,000 students, CPS makes up about one-fifth of the entire student population in Illinois.
Sure, all school districts in the state stand to receive more money from Madigan’s short-sighted plan (how much they’ll get depends on how many millionaires decide to leave); but it’s only CPS that’s dealing with such a large contribution spike.
Madigan’s plan makes his tax increase retroactive to January 2014. That means CPS would stand to gain a combined $400 million in new revenues for 2014 and 2015.
That money would help pay CPS’s increased pension contribution, but the district’s pension system is past the point of a quick fix. Which is what Madigan’s plan really is – a bailout with state tax dollars.
Madigan’s proposal can be read by clicking here.