The 2.25 percent “solution”
Wednesday, Mar 18, 2015 - Posted by Rich Miller
* I’ve been telling subscribers about this across the board 2.25 percent cut since March 4th…
Under a framework designed to help Gov. Bruce Rauner manage the state through the end of the current fiscal year on June 30, state spending would undergo a 2.25 percent reduction.
The cut would free up money for the Republican governor to keep a child care program afloat, as well as pay prison guards and court reporters.
But the concept, floated by House Speaker Michael Madigan, D-Chicago, would mean less money for school districts as they head into the final months of the school year.
“Yes, that is a sticking point,” state Sen. Andy Manar, a Bunker Hill Democrat, said Tuesday. “An across-the-board cut will have a disproportionate effect on the poorer districts of the state.”
There is, indeed, a sticking point over the school funding idea. And there’s more to this not-yet-deal than that cut. Subscribers know more.
* The Rauner administration’s response to the above story…
We don’t believe in negotiating through the press.
You will recall that Rauner blasted Pat Quinn most of last year for allegedly cutting state funding for education, even though Quinn didn’t actually cut state school dollars. But there could be a loophole here if the 2.25 percent cut still leaves schools with more money than they received last fiscal year.
* Even if that’s true (and I think it is), cutting school budgets this late in their fiscal year is going to cause some real pain. Back to Erickson’s story…
“Obviously, you can’t make staffing adjustments now,” said Maroa-Forsyth Superintendent Michael Williams.
Statewide school organizations fear the state will simply not send out a final reimbursement check to districts for special education and transportation programs.
Yep. Budget making is so easy peasy.
- A guy - Wednesday, Mar 18, 15 @ 9:10 am:
Nothing’s easy peasy in government, especially here. But it does look like there’s been enough movement to shake loose an agreement with a few details to be worked out. Everyone appears to have made some adjustments to advance the ball.
I’m not overwhelmed, but there is room for a little enthusiasm.
- HL - Wednesday, Mar 18, 15 @ 9:17 am:
Everybody wants to go to heaven—nobody wants to die.
- Wordslinger - Wednesday, Mar 18, 15 @ 9:36 am:
When’s the governor going to call in the Four Tops to settle this? He said he could do it in a day.
Does he have more pressing business?
- Arsenal - Wednesday, Mar 18, 15 @ 9:36 am:
” the concept, floated by House Speaker Michael Madigan”
But I was pretty sure that Democrats refused to consider any cuts and were too cowardly to float a plan!
- A guy - Wednesday, Mar 18, 15 @ 9:48 am:
=== Wordslinger - Wednesday, Mar 18, 15 @ 9:36 am:
When’s the governor going to call in the Four Tops to settle this? He said he could do it in a day.
Does he have more pressing business?===
The goal is medium rare and one of them is still far too pink.
- JS Mill - Wednesday, Mar 18, 15 @ 9:51 am:
I’ll take it.
Move on to FY 16.
NOW.
- Oswego Willy - Wednesday, Mar 18, 15 @ 9:53 am:
===We don’t believe in negotiating through the press.===
Do ya believe in sitting down and negotiating?
It’s nothing until they all sit down. That’s on Rauner. It’s what governors do. Ask around.
- Soccermom - Wednesday, Mar 18, 15 @ 10:13 am:
Ugh. I hate across-the-board cuts. They’re for lazy people who don’t want to go line-by-line through an actual, you know, budget. And when it comes to education, they are tremendously painful to poorer districts. Please don’t do this.
- Iron Duke - Wednesday, Mar 18, 15 @ 10:14 am:
I thought the problem was bigger than a 2 percent shortfall
- VanillaMan - Wednesday, Mar 18, 15 @ 10:22 am:
Sure, no one thinks across-the-board cuts are good, yet it is, right now, probably the only political way of forming some kind of compromise.
I can see the governor doing a 2% annual across-the-board budget reduction for his entire term. It would be offset by economic growth which would be used to pay back outstanding balances. A retirement income tax of 1% could then be applied to pension costs, addressing that situation.
- Arsenal - Wednesday, Mar 18, 15 @ 10:23 am:
“The goal is medium rare and one of them is still far too pink.”
Okay, but the Gov himself is at about Medium, and two of the other burners aren’t even lit yet.
- Rich Miller - Wednesday, Mar 18, 15 @ 10:25 am:
===I thought the problem was bigger than a 2 percent shortfall ===
Subscribe.
- CF Reader - Wednesday, Mar 18, 15 @ 10:26 am:
It’s like making sausages!
- MrJM - Wednesday, Mar 18, 15 @ 10:42 am:
“We don’t believe in negotiating t̶h̶r̶o̶u̶g̶h̶ ̶t̶h̶e̶ ̶p̶r̶e̶s̶s̶.”
That response from the Rauner camp was unnecessarily wordy.
– MrJM
- Wordslinger - Wednesday, Mar 18, 15 @ 10:48 am:
Guy, have you added the governor to the already enormous client base for your unsolicited spokesman business?
If not, I’ll just let him speak for himself.
- Iron Duke - Wednesday, Mar 18, 15 @ 11:02 am:
Interesting dynamic between the Centrist Democrats/ Independents and the Liberal Democrats who want to protect the status quo. I would be curious to see where the 20 Million is coming from
- A guy - Wednesday, Mar 18, 15 @ 11:04 am:
Sling, didn’t understand that your question was exclusively rhetorical. Should have known better. You always have the answers before the questions are asked. My bad.
- Andy S. - Wednesday, Mar 18, 15 @ 11:04 am:
Rauner is talking about cutting higher education by 31% in next year’s budget, but a 2.25% cut for elementary and secondary is too large for the school districts to handle? Something is seriously out of whack here - and people wonder why college tuition is increasing so much?
- The Colossus of Roads - Wednesday, Mar 18, 15 @ 11:05 am:
The biggest budget costs for Illinois are Education, Pensions, Health Care and Welfare. If you can’t cut pensions, what is left? You either cut the remainder, increase revenue or do both. Let the games begin.
- Jack Stephens - Wednesday, Mar 18, 15 @ 11:12 am:
I always find it amusing when Right Wing Conservatives (who are mostly lower middle class) defend Entitlements for the Elites!
Indeed….where can the 20 million come from?
- walker - Wednesday, Mar 18, 15 @ 11:13 am:
Please! Keep this focused only on the funding needs between now and June 30, 2015, and leave discussions of the 2016 budget out of it.
This is not the final answer from MJM, but a signal of flexibility and a push to get something done.
Take the Kotowski/Steans funding transfers already proposed, and make up the difference from across the board if we must. Get it over with.
- Anonymous - Wednesday, Mar 18, 15 @ 11:24 am:
- You always have the answers before the questions are asked. -
No, Rauner himself said if they got together in a room they could hash it out in a day.
Rauner has a great big room on the second floor of the capitol, free to request a meeting any time.
- Roscoe Tom - Wednesday, Mar 18, 15 @ 11:50 am:
It is not the room, it’s the seating arrangement or who gets the throne.
- A guy - Wednesday, Mar 18, 15 @ 11:51 am:
===walker - Wednesday, Mar 18, 15 @ 11:13 am:
Please! Keep this focused only on the funding needs between now and June 30, 2015, and leave discussions of the 2016 budget out of it.===
Yep.
Anon 11:24. One leader hasn’t gotten the memo. When he does, you’ll have hash.
- Earnest - Wednesday, Mar 18, 15 @ 12:14 pm:
Across-the-board cuts vary in impact as some of the cuts will also reduce federal matching $$.
- Been There - Wednesday, Mar 18, 15 @ 12:19 pm:
I thought most of the school districts had decent reserve funds and should be able to dip into those. Painful from an accounting standpoint but most should have no problems this year. The ones that don’t have enough reserves will have a problem.
http://newstrib.com/main.asp?SectionID=2&SubSectionID=27&ArticleID=42644
- Anonymous - Wednesday, Mar 18, 15 @ 1:07 pm:
- Anon 11:24. One leader hasn’t gotten the memo. -
Can you read?
Rauner said passing a budget is easy. He said they could do it in a day if they all sat down together.
I haven’t heard him say the leaders are refusing to meet.
So, talk to your guy and stop making excuses.
- JS Mill - Wednesday, Mar 18, 15 @ 1:11 pm:
=Rauner is talking about cutting higher education by 31% in next year’s budget, but a 2.25% cut for elementary and secondary is too large for the school districts to handle?=
That 2.25% is in addition to the 11% cut we have been experiencing for several years. Add in another 50% cut to transportation 4 years ago and only 3 of 4 mandated categorical payments (for trans that means 25% cut after a 50% cut). For large geographic districts the cut to transportation, which we are mandated to provide, has been a killer.
For some districts, especially downstate, the 2.25% could be a final straw. A neighboring district is cutting 20% of their employees and reducing the hours and benefits of another 15%.
Not very good for the economy, but you have to live within your means no matter how bad that is for kids right?
- Anonymous - Wednesday, Mar 18, 15 @ 1:17 pm:
==but a 2.25% cut for elementary and secondary is too large for the school districts to handle?==
It’s not the size of the cut so much as it is the timing of the cut. It’s already the middle of March.
- JS Mill - Wednesday, Mar 18, 15 @ 1:17 pm:
@ Been There- There are districts that have ample reserves to tide them over. But, fund balances are not like a household checking account. Some funds have restricted uses. Other can be transferred to other funds if need be. Many of the reports have been very simplistic and do not explain the peculiarities of Illinois School Fund Accounting.
Last year 67% of school districts were deficit spending.
- Demoralized - Wednesday, Mar 18, 15 @ 1:17 pm:
==but a 2.25% cut for elementary and secondary is too large for the school districts to handle?==
It’s not the size of the cut so much as it is the timing of the cut. It’s already the middle of March. There’s not time to adapt.
- Rich Miller - Wednesday, Mar 18, 15 @ 1:24 pm:
Demoralized is correct. The end of the school fiscal year for most schools is June 30. So, a 2.2 percent cut enacted on April 1 is the equivalent of an 8.8 percent full-year cut, only much more difficult to implement because it’s coming at the end of the school year, not the beginning.
- East Central Illinois - Wednesday, Mar 18, 15 @ 1:39 pm:
= = It’s not the size of the cut so much as it is the timing of the cut. It’s already the middle of March. There’s not time to adapt. = =
Demoralized is right on track. For school districts, reduction in force notices need to be done either last month or this month, finalized in April. In most school districts, salaries and benefits make up 70-80% of the budget. A school district cannot take a 2.5% cut in revenue this late in the year and not feel a dramatic impact.
Kind of like going to the ninth inning, game all tied up, going out to the mound and yanking the pitcher, only to realize that you have NOBODY in the bullpen and your position players can’t pitch worth a lick.
- Bobby Hill - Wednesday, Mar 18, 15 @ 2:02 pm:
All districts are different but at this point all expect hiccups from the state like skipped payments. When was the last year the state made all the full payments on time? And don’t most school districts RIF as standard operating procedure, if they don’t they haven’t been paying attention for the last decade.
- Tired of nonsense - Wednesday, Mar 18, 15 @ 2:07 pm:
I always fin it amusing when left-wing liberals (who are mostly lower middle class) defend entitlements for rich limousine liberal eletes!
Indeed, if not for nearly across the board hikes, What then?
- Been There - Wednesday, Mar 18, 15 @ 2:11 pm:
Thanks JS.
- East Central Illinois - Wednesday, Mar 18, 15 @ 2:54 pm:
Bobby Hill == And don’t most school districts RIF as standard operating procedure, if they don’t they haven’t been paying attention for the last decade ==
RIF’s are not nearly as easy to do this year as in the past years since the approval of Senate bill 7. It has been and still is a highly volatile situation when doing a RIF. Especially difficult to RIF when you have done your budget in July - August and then the state tells you in April or later the following year, that oh, yeah, we’re not going to send you 2.25% of that money we promised you back last summer.
- Mama - Wednesday, Mar 18, 15 @ 3:07 pm:
++Last year 67% of school districts were deficit spending. ++ I thought the # of schools operating with a deficit was much higher than 67%.
- JS Mill - Wednesday, Mar 18, 15 @ 3:47 pm:
@ Demo and Rich- I appreciate what you saying for sure.
We budgeted expecting the state to struggle to meet their projected level of school funding/ commitment. That was tough to do after going through several years of large deficits and then, last fall, making major spending cuts. I still consider our district to be lucky because we have fund reserves and nearly no debt (borrowing as a last resort).
I did not have a crystal ball but it turns out we were right. Sometimes it is better to be lucky than good I guess. Some of my colleagues did not want to face reality, that would have meant some tough decisions. I can personally attest to the costs those decisions carry, very personal costs. The stress level among superintendents, especially downstate, is very high.
Some districts did not or could not do the forecasting we did. Most were told what the realities might be but ignored them. Everyone knew the state budget was a fantasy but most expected Quinn to win. That was the gamble they took. I feel for all of them and wonder what happens next.
RIF’s, Bobby Hill, should not be done as a “SOP”. They should be done in accordance with the statutes. They also involve people and we are in the people business. If you have to put people out of work due to necessity then you do. To do it when you do not have to or on pure speculation is immoral and illegal. Our primary function is to serve kids and they deserve a quality education, not simply bare bones or the 4 R’s. That is further complicated by the fiscal issues that you mention which are absolutely spot on.