*** UPDATED x1 *** Unclear on the concept
Thursday, Aug 3, 2017 - Posted by Rich Miller
* From the Illinois Policy Institute…
PolitiFact Illinois and the Better Government Association, or BGA, have botched their fact-checking of Senate Bill 1, a bill that bails out Chicago Public Schools as part of a rewrite of Illinois’ education funding formula.
* So, let’s take their points one by one…
CPS gets to keep $200 million in block grant funding
Um, keeping what you currently have isn’t a bailout, it’s keeping what you have. You may not think CPS deserves it, but status quo funding isn’t a bailout.
* Next…
SB 1 allows CPS to appear poorer than it actually is when applying for state aid, granting the district even more funding. No other district gets to do that.Currently, CPS contributes about $500 million annually to pay down its unfunded pension liability. The new funding formula allows CPS to deduct that $500 million from its local resources for education when it applies for state aid. That makes CPS look poorer and helps ensure the district gets more money from the state than it should.
I’ve seen numbers of up to $40 million in state costs for that, so it’s hardly a bailout. Also, the state picks up all legacy costs for suburban and Downstate teacher pensions, and that would of course continue. So, are those school districts being bailed out because they keep the largesse they currently have?
* Another one…
SB 1 allows Chicago to benefit from a set of rules that allow select school districts to undervalue their property wealth so they look poorer than they actually are.Districts whose revenues are affected by local property tax caps (Property Tax Extension Limitation Law, or PTELL) and special economic zones (tax increment financing, or TIF) are able to underreport their available property wealth when applying for state aid under the new SB 1 formula, just as they can under the current formula.
“Just as they can under the current formula,” according to the Institute. So, again, they keep what they have. How is that a bailout?
* Another…
Chicago will also be a major beneficiary of SB 1’s “hold harmless” provision. This provision ensures that a district cannot receive less in state aid funds than it did the previous year. The provision protects a district’s state funding even if it experiences changes in demographics, such as a drop in student attendance that would have otherwise led to less state funding.
As we’ve already discussed today, 222 school districts lost students between FY15 and FY16. So, this is not an issue confined to one district.
* One more…
In addition to all of the above, the state will begin paying CPS’ normal pension costs going forward. SB 1 requires state taxpayers to give the district at least $215 million for CPS’ “normal” pension and health care costs – the additional benefits Chicago teachers earn annually – every year going forward. This puts the district on par with other districts around the state.
And putting CPS on par with other districts in this one regard is a bailout? Gov. Rauner’s AV would achieve the same end by a different means. Is he bailing out Chicago too?
*** UPDATE *** The Illinois Policy Institute has responded. Click here for the document they sent me.
- Lynn S. - Thursday, Aug 3, 17 @ 9:36 am:
I live in Champaign Unit 4 School District, which also has PTELL and TIF. It might be FASCINATING to see how many other districts besides 299 (Chicago) are on this list of “select districts” that benefit from the special rules.
Would ISBE have this information, and would they (or whomever that gatekeeper is) share it with you and your loyal readers, Rich?
- Blue Bayou - Thursday, Aug 3, 17 @ 9:40 am:
The only reason IPI even gets reported here and elsewhere is its gigantic budget.
Does IL Working Together or any other advocacy group get this kind of coverage?
Not blaming you Rich, at all. Just pointing out they have a huge megaphone because of funding by wealthy backers with an agenda.
- Rich Miller - Thursday, Aug 3, 17 @ 9:43 am:
===Does IL Working Together or any other advocacy group get this kind of coverage?===
Take a breath already.
- Demoralized - Thursday, Aug 3, 17 @ 9:44 am:
Their real goal is to see CPS get less money than they have in the past. No other conclusion can be drawn from their comments.
- Demoralized - Thursday, Aug 3, 17 @ 9:46 am:
Also, I’m having some difficulty in distinguishing IPI from the Governor’s Office since they took it over. Isn’t the IPI now just an extension of the Governor’s communications staff (not that it hasn’t been in the past but it’s more official now)?
- City Zen - Thursday, Aug 3, 17 @ 9:46 am:
==222 school districts lost students between FY15 and FY16==
Some spreadsheet observations:
- 152 of those districts lost was less than 3% of their students.
- 99 of those districts lost less than 10 total students (10% lost 2 or less).
- Chris Welch is gonna need a lot of help.
- Mike - Thursday, Aug 3, 17 @ 9:46 am:
So many conflicting stories going around. So are you saying this bill puts CPS on the SAME funding program as the rest of the state? If not then why do we think that is good?
- Blue Bayou - Thursday, Aug 3, 17 @ 9:47 am:
Thanks for your concern, Rich.
My breathing checked out just fine. I probably do need to hydrate better, though.
- Joe Bidenopolous - Thursday, Aug 3, 17 @ 9:48 am:
They’re not unclear of the concept. They’re very clear about it. They’re just spreading misinformation in a propaganda campaign to divide the state and support Governor Snowflake. It’s DC style and it’s shameful, but they know what they’re doing.
- Anonymous - Thursday, Aug 3, 17 @ 9:49 am:
CPS also pays the teacher’s required share of the contribution for pensions. Most Illinois districts do not.
- Anonymous - Thursday, Aug 3, 17 @ 9:49 am:
Empty school seats should not be eligible for state aid to education no matter where they are.
- Anon221 - Thursday, Aug 3, 17 @ 9:50 am:
Lynn S.- These might help…
http://www.revenue.state.il.us/localgovernment/propertytax/ptell.htm
https://www.iasb.com/journal/j010208_03.cfm
http://blog.iasb.com/2015/09/school-districts-can-be-harmed-by-bad.html
- NeverPoliticallyCorrect - Thursday, Aug 3, 17 @ 9:56 am:
Putting all the arguments for and against helping CPS aside, the most important issue is how do we prevent the children who attend this system from any additional trauma. It’s clear that CPS screwed up their finances. OK, let’s just all stipulate that and move on to fixing things. I’m ok with giving them money but I am not willing to keep everything else the same. This district is a mess and needs to be reorganized. I wish I had the property value that CPS has. They need to rightsize as I said before, not on the basis of loud-mouthed community organizers but on real population numbers. They need to get their contracts under control. They need to downsize their central office staff costs. And if they want the same assistance that other districts get then they need to play by the same rules, a locally elected school board. Anything think Rahm and the Dems want that. So until that happens nothing extra for CPS in this school board members mind.+
- Ugh - Thursday, Aug 3, 17 @ 10:01 am:
@Lynn S.
Nowhere comes close to CPS when it comes to hiding property wealth through TIF. More than a half a billion dollars were diverted to Chicago TIFs last year, a record high. http://www.cookcountyclerk.com/newsroom/newsfromclerk/Pages/ChicagoTIFstogeneraterecord561million.aspx
- TrumpsSmallHands - Thursday, Aug 3, 17 @ 10:01 am:
Anon @ 9:49AM
> CPS also pays the teacher’s required share of the contribution for pensions. Most Illinois districts do not.
That isn’t accurate per the IPI more than 60% of districts pick some or all of the teachers contribution.
https://www.illinoispolicy.org/understanding_teacher_pension_pick_ups/
- Rich Miller - Thursday, Aug 3, 17 @ 10:12 am:
===Nowhere comes close to CPS when it comes to hiding property wealth through TIF====
Well, one reason is that Chicago is so large compared to other units of government.
- Chris - Thursday, Aug 3, 17 @ 10:17 am:
“- 152 of those districts lost was less than 3% of their students.”
And one of those was CPS–down 1.1% from fy15 to fy16.
- JS Mill - Thursday, Aug 3, 17 @ 10:23 am:
=222 school districts lost students between FY15 and FY16=
As CZ already pointed out, many of those districts lost a very small number of students (Rich also mentioned that yesterday). In addition many of the districts that didn’t lose only gained a few or stayed the same like my district. if one or two families leave they/we would show a loss. So that group is pretty large.
= It might be FASCINATING to see how many other districts besides 299 (Chicago) are on this list of “select districts” that benefit from the special rules.=
Many (I have never counted, but I am certain the number is large from anecdotal experience) that a majority of small rural districts have TIFs and some have PTELL too. Rauner has no clue how many it impacts. Or maybe he does.
- Joe M - Thursday, Aug 3, 17 @ 10:28 am:
==Isn’t the IPI now just an extension of the Governor’s communications staff ==
Or is the Governor just an extension of IPI?
- Robert J Hironimus-Wendt - Thursday, Aug 3, 17 @ 10:30 am:
Question: Following up on demoralized @ 9:46, is IPI legally considered a tax-exempt, non-partisan organization? If so, is it worth challenging that status in court, given that they now occupy the executive and at the same time advocate from the executive?
- Three-Finger Brown - Thursday, Aug 3, 17 @ 10:37 am:
Of course it’s not a bailout, but by repeating that loaded word thousands of times, IPI is using simplicity in lieu of truth. It’s a strategy that worked well last November.
The math and logic you use in this post doesn’t fit in a Tweet. “#bailout” does.
- City Zen - Thursday, Aug 3, 17 @ 10:37 am:
Chris - Good point. Losing 1% of your student population could mean 3 students or 3,000. Should both be treated the same? Probably not.
Hold harmless should be re-calibrated every few years. Give the districts enough time to plan around declining enrollment. At some point, you can’t keep pumping more money into shrinking districts.
- Anon221 - Thursday, Aug 3, 17 @ 10:38 am:
JS Mill and Lynn S.- Did some more digging…
http://www.cookcountyclerk.com/aboutus/map_room/pages/tifmaps.aspx
https://tinyurl.com/ycpas2nr
The second is the IL Comptroller 2012 report for Illinois TIF districts. Not sure if there is a more recent list. This is what came up on the site’s search engine.
- Johnny Justice - Thursday, Aug 3, 17 @ 10:39 am:
Not to reduce a school district’s property value to account for TIFs would be intellectually dishonest. This is because the increment of property value created after the initiation of the TIF can’t be taxed by the school dist. until the TIF expires.
- Harvest76 - Thursday, Aug 3, 17 @ 10:47 am:
I think what the Illinois policy Institute and the governor really mean to say is, anything more than less is going to be considered a bailout.
- Driveby - Thursday, Aug 3, 17 @ 10:49 am:
Politifact article says “Chicago’s special block grant goes away.” In fact, it stays for 20 years. There are more outright errors in that article, but why bother to go through them with folks that don’t care.
- Robert J Hironimus-Wendt - Thursday, Aug 3, 17 @ 11:00 am:
From the IRS: “To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.”
It is hard to see how IPI fits this definition.
- Skeptic - Thursday, Aug 3, 17 @ 11:19 am:
“It is hard to see how IPI fits this definition” There are other tax-exempt categories than 501(c)(3).
- Mike - Thursday, Aug 3, 17 @ 11:29 am:
Do any of the proposals show an analysis of property wealth per sudent - before or after PTELL limitations / TIF diversions? How does CPS stack up vs. wealthy suburbs vs. downstate rural? A major stumbling block in any discussion of “reform” - in MHO.
- Robert J Hironimus-Wendt - Thursday, Aug 3, 17 @ 11:59 am:
@ Skeptic - If you read the IRS definitions of prohibited behaviors regarding political actions and lobbying, it is clear that IPI has crossed the line, and is now violating the tax codes. In addition, the creating of the pipeline between IPI and Rauner’s Administration (not one or two, but several hires) also would call into quesion the tax exempt status of IPI. It would seem to me any ole lawyer, even one educated in a log cabin, would be able to make the case for revoking their 501(c)(3) status given their engaging in political activities (e.g., attacking Madigan publicly) and their lobbying on behalf of Rauner’s Turnaround Agenda (e.g., their own motto).
- Robert J Hironimus-Wendt - Thursday, Aug 3, 17 @ 12:00 pm:
- IPI claims 501(c)(3) status, not another status.
- JS Mill - Thursday, Aug 3, 17 @ 12:04 pm:
= At some point, you can’t keep pumping more money into shrinking districts.=
Yes and no. Depends on the loses and their impact. The majority of districts outside Cook County are K-12 unit districts. Even a 10% drop across a k-12 district may not result in the need for fewer teachers. Our district lost just over 10% of enrollment over a 10 year period and it took that much time for grade levels to get to a point where we could reduce staff and still provide the level of instruction we expected.
Over that 10 year period costs do increase, especially for the things that schools spend money on. I know some out there think our expenses stay static or get lower because we are not part of the real world, but that is not factual. That may have been a bit snarky.
- Skeptic - Thursday, Aug 3, 17 @ 1:14 pm:
RJH: Ok, I stand corrected. While what I said was technically true true I should have looked up IPI’s filing before responding. Disclaimer: I’m probably the last one that’s going to come to the defense of the IPI.
- G'Kar - Thursday, Aug 3, 17 @ 4:07 pm:
From the update:
“The correct number state that CPS had an enrollment of 398,259 for the 2015-2016 school year and an enrollment of 393,112 for the 2016-2017 school year - a decrease of 11,415.”
Gesh, talk about fuzzy math.
- Fixer - Thursday, Aug 3, 17 @ 4:23 pm:
Here, IPI, let me handle the math for you, given its proven difficult for you guys here lately. 398,259-393,112=5147. Best Team in America.
- wordslinger - Thursday, Aug 3, 17 @ 8:27 pm:
“The correct numbers state that CPS had an enrollment of 398,259 for the 2015-2016 school year and an enrollment of 393,112 for the 2016-2017 school year - a decrease of 11,415.”
LOL, so math’s not their thing….. I’m sure the rest of their numbers are right, though.
Seriously, how did they land on such a precisely far-off, wrong calculation? It’s not even close, by the eyeball test.
Maybe they should have had a teacher check their work.
- Lynn S. - Thursday, Aug 3, 17 @ 9:34 pm:
“CPS lost 11,415 students”.
The Southern Illinois county I grew up in has a population lower than that.
- City Zen - Thursday, Aug 3, 17 @ 10:48 pm:
==“The correct number state that CPS had an enrollment of 398,259 for the 2015-2016 school year and an enrollment of 393,112 for the 2016-2017 school year - a decrease of 11,415.”==
CPS 20th day enrollment:
2016 = 392,285
2017 = 381,349
Decrease = 10,936
Truly lost students = 479