The education funding reform bill which passed the House and Senate in May and was finally sent to Gov. Bruce Rauner’s desk in July was the product of four years of research, endless listening tours and lots of hard bargaining.
The House Democrats changed some things at the last minute to benefit Chicago and the governor didn’t like it, but his own education czar claimed the governor still approved of “90 percent” of the legislation.
However, when Rauner issued his amendatory veto of Senate Bill 1 this week, he introduced a bunch of new ideas that had never been on the table, including during endless discussions among members of his own education funding reform commission.
These new ideas are poisoning the already putrid Statehouse water and are prompting some folks to suspect that the governor’s new top staffers from the Illinois Policy Institute are attempting to sabotage the bill.
The far-right group is on record opposing the whole idea of the “evidence-based” school funding formula contained in the Democrats’ SB1 and endorsed by the governor’s funding reform commission and by Republicans in both legislative chambers. Could some of those same people who are now running Rauner’s office be out to kill off the progress made over the years?
Historically in Illinois, the best way to keep suburban and Downstate Republicans from voting for a bill is to label it a “Chicago bailout.” Rauner and the Illinois Policy Institute have done so repeatedly with SB1, even though Politifact has rated the claim “false” and the almost always pro-Rauner Chicago Tribune editorial board has argued it is not a bailout.
Rauner’s amendatory veto would change the way school districts currently calculate how much property tax revenue they can no longer capture after other local governments create Tax Increment Financing districts. Existing state law recognizes the reality that the school districts won’t receive that money, but the governor’s proposal would order the State Board of Education to ignore that reality.
Doing that would put enormous financial pressure on schools, which might then lead to some reforms of the TIF laws. The Illinois Policy Institute wants to get rid of TIFs. I don’t disagree with them, but I’d rather that we not use school kids’ education as the hammer to do it.
Keeping it Chicago-centric, the Illinois Policy Institute pointed last week to Cook County Clerk David Orr’s claim that Chicago’s TIF money accounts for almost 10 percent of all property tax revenue billed within the city. In suburban Cook, Orr reports, TIF revenues equal about 3.5 percent of property tax bills.
Nobody involved with the funding reform negotiations has ever publicly proposed changing the way the State Board of Education projects school districts’ potential property tax revenue collections by essentially wishing away the impact of the state property tax cap law (known as PTELL). Nobody, that is, until the governor issued his amendatory veto.
Partly because Chicago is so large and has so much property wealth (particularly in the Loop area), it benefits more than anywhere else from the property tax cap school “subsidy,” as the Illinois Policy Institute calls it. The group wants to get rid of that “subsidy.”
But the political danger here is clear. By going after Chicago so hard and making its school district look “wealthier” than it really is by officially pretending that it can capture more tax money than it really can, the governor’s amendatory veto would also create collateral damage throughout the state. TIF districts have been created in a ton of communities, Downstate and in the suburbs. And lots of school districts also fall under the property tax cap.
Sen. Andy Manar, the Senate Democrats’ lead education funding negotiator, claimed last week that the governor had completely gutted “the whole purpose” of SB1 by changing what’s known as the “adequacy calculation.” The bill as passed calculates need by factoring in the actual costs of things schools do. That calculation, Manar said, is the “most profound difference” between the status quo today and what his bill tries to fix.
So, if Manar is right about the governor’s proposed changes, that would be additional, um, evidence that there may be an attempt to sabotage evidence-based funding from within Rauner’s office.
There are other “coincidences” between Rauner’s amendatory veto (and demands being made during negotiations) and Illinois Policy Institute dogma, but the basic premise is that the group wants to kill this bill and Rauner’s proposed changes could conceivably lead to that result if the governor sticks to his guns during negotiations.
While Bruce Rauner has promised for weeks that his school funding veto won’t take away money from any school district besides Chicago, the facts are not on his side. Language in Rauner’s veto — pushed by the right-wing Illinois Policy Institute now running the governor’s office — would leave hundreds of school districts across the state with less money.
Rauner is proposing changes to rules in the school funding formula bill to target Chicago’s funding. But those changes don’t just cripple CPS, they also damage schools across the state. Peoria Public Schools could lose $1 million if Rauner’s changes became law. Rich Miller explains in his Crain’s column:
By going after Chicago so hard and making its school district look “wealthier” than it really is by officially pretending that it can capture more tax money than it really can, the governor’s amendatory veto would also create collateral damage throughout the state. TIF districts have been created in a ton of communities, Downstate and in the suburbs. And lots of school districts also fall under the property tax cap.
“Bruce Rauner is at war with an entire city he is supposed to represent and the collateral damage will impact schools across the state,” said Pritzker campaign spokeswoman Jordan Abudayyeh. “Rauner’s Illinois Policy Institute-backed veto would suffocate our public education system and advance their radical agenda.”
- Fax Machine - Monday, Aug 7, 17 @ 9:10 am:
End result of all this will be to pass a bill to keep funding schools the old way & kick the can on evidence based funding.
- Honeybear - Monday, Aug 7, 17 @ 9:11 am:
Malum in se to mess with children’s education.
- Arsenal - Monday, Aug 7, 17 @ 9:16 am:
It’s notable that IPI spent most of the weekend deflecting blame for the PTELL/TIF portion of the AV, rather than trying to sell it on the merits.
- Anonymous - Monday, Aug 7, 17 @ 9:17 am:
==rather not see kids’ education used as the hammer=
Then using something less explosive wouldn’t do the trick! That’s been Rauners modus operandi. Hit people where it hurts most. Squeeze the beast. Crisis and leverage and all that.
- Keyrock - Monday, Aug 7, 17 @ 9:19 am:
3 thoughts:
1. Dawn Clark Netsch was correct about the tax shift. Shame it didn’t happen.
2. Where is the State going to get the money to pay the increased funding (which it should pay)?
3. Honeybear’s favorite word about the Governor, as usual, applies.
- Dee Lay - Monday, Aug 7, 17 @ 9:28 am:
That ISBE score will be….interesting.
- City Zen - Monday, Aug 7, 17 @ 9:30 am:
==Where is the State going to get the money to pay the increased funding (which it should pay)?==
Unfortunately, TRS is asking the same question.
- blue dog dem - Monday, Aug 7, 17 @ 9:30 am:
‘Adequacy calculaton’?'evidence based? Great buzz words dreamt up for marketing. We need to roll back things we do in K-12, not keep expanding. As a minimum, freeze spending levels. Failure to do so will result in raising income tax levels on the working poor and middle classes within 3 years. You read it here first.
- SAP - Monday, Aug 7, 17 @ 9:37 am:
For at least the last dozen years, probably longer, the House and Senate Revenue Committees have required affected taxing bodies to provide letters of support before letting new TIF legislation out of committee. The Governor’s AV changes those bargains midstream. Not cool man.
- wordslinger - Monday, Aug 7, 17 @ 9:38 am:
The governor’s position is clear, nearly three years into his administration and a few days before state checks to schools are scheduled to go out:
–Districts should collect more in property taxes.
– There should be a property tax freeze.
– The state should provide more money for K-12.
– The state should provide less money for K-12.
Made a lot of sense at dorm-room debate club.
- Put the fun in unfunded - Monday, Aug 7, 17 @ 9:39 am:
TIF is the cheapest check for any municipality to write because 2/3 comes from the schools’ pockets, generally to subsidize commercial developers. Especially in light of the McPier swap, should the state funding formula continue to provide more money to areas that have property wealth, but choose to divert it for other purposes? Particularly in Chicago where there is no elected school board being overridden by city officials, but where the same person who controls the schools, has a lot to say about TIF?
- Buzz Fugazi - Monday, Aug 7, 17 @ 10:06 am:
I think it will be awesome when the Coen Brothers show us their version of the story.
- JS Mill - Monday, Aug 7, 17 @ 10:21 am:
=As a minimum, freeze spending levels. Failure to do so will result in raising income tax levels on the working poor and middle classes within 3 years. You read it here first.=
Nice thought, but you are about five years late as school funding has been rolling back.
Those folks you cite as victims will benefit from increased school funding (real increases not phony ones). Not that you seem influenced by facts but the Google is full of links to research.
Do try to keep up….
- dr. reason a. goodwin - Monday, Aug 7, 17 @ 10:21 am:
Given the often cluelessness of this administration, one wonders if they even understood the far reaching impact of the changes they were making.
- Flapdoodle - Monday, Aug 7, 17 @ 10:34 am:
Blue Dog — Just curious: What would you have rolled back in K-12 education? Seems to me it’s pretty thin already.
- DuPage - Monday, Aug 7, 17 @ 10:37 am:
@- wordslinger - Monday, Aug 7, 17 @ 9:38 am:
===The governor’s position is clear, nearly three years into his administration and a few days before state checks to schools are scheduled to go out:
–Districts should collect more in property taxes.
– There should be a property tax freeze.
– The state should provide more money for K-12.
– The state should provide less money for K-12.
Made a lot of sense at dorm-room debate club.===
Downing one of those $10,000 bottles of wine right before deciding positions might have something to do with it.
- spidad60 - Monday, Aug 7, 17 @ 10:46 am:
question: with the talk of TIF funds counting or not counting as “wealth” in a school district, how does Springfield Dist 186 deal with all of the state owned property in it’s boundaries?
- Judgment Day - Monday, Aug 7, 17 @ 10:50 am:
“It’s notable that IPI spent most of the weekend deflecting blame for the PTELL/TIF portion of the AV, rather than trying to sell it on the merits.”
——————
From an insider (now outside) standpoint, TIF’s and Special Service Districts (SSA’s) are actually becoming giant honey pots of constant streams of funding to be used to fund all sorts of local projects with very little public scrutiny.
For example, virtually all TIF districts I knew were setup by law with the then maximum term of 23 years. So, if they were setup back in 1978, they would expire in 2001. That means all that ‘TIF Increment’ money would be returned back to the non TIF tax districts (Technical term = “Recovered TIF Increment”).
Surprise! The legislature ‘adjusted’ the laws for an ‘extension’ of the TIF districts (like an added 10-15 years). Yeah, they added some new hoops for the TIF’s to have to jump through, but it wasn’t much.
But more recently, you’ve got the oldest IL TIF districts coming closer to the end of their first extension.
IMO, the only way these TIF districts are ever going to be allowed to expire (and the ‘TIF Increment’ local property tax money being returned back to the non municipality tax districts) is for the TIF / SSA tax districts to be tossed into these SB1 (or successor) negotiations.
Facts are the ‘TIF Increment’ (money goes only to the TIF districts) is just way, way too much money, and it’s all going to special interest groups, and the accountability is minimal.
You want to get rid (or severely limit) TIF districts? This may be your best chance to do it.
You may not like it, but there truthfully may not be a better way to get it done.
I seem to remember a certain IL pol who once reportedly said “You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.”.
Just remember “When they say it’s not about the money, it’s ALWAYS about the money”. Particularly in the case of TIF / SSA districts.
- Blue dog dem - Monday, Aug 7, 17 @ 10:59 am:
Judgement Day. Very good work.
- walker - Monday, Aug 7, 17 @ 11:28 am:
This is not an AV, because it goes significantly beyond the legal scope allowed for that process. It cannot be accepted as is. It can only be overridden or the bill can be dropped entirely. It is a political position paper demanding new legislation. It is a classical “move the goal line” tactic after a deal had mostly been struck.
More deliberate destruction and harm.
- Corrupt Collectivist - Monday, Aug 7, 17 @ 11:29 am:
==We need to roll back things we do in K-12, not keep expanding. ==
Said no one ever who cared about the future, blue dog…
- Free Set of Steak Knives - Monday, Aug 7, 17 @ 11:35 am:
@Judgement Day -
Great arguments re: TIFs.
Is holding school funding hostage really a morally justifiable way to get TIF reform?
- Never Politically Correct - Monday, Aug 7, 17 @ 11:40 am:
Flapdoodle- one area of rollback would be in the consistently flawed testing we have to do as school districts. Ever since the state has taken this over the process has been worthless. Results are inconsistent, late and ever changing. Let schools choose from school wide assessments that are on the market and stay with them for a longer period to ensure reliability.
- blue dog dem - Monday, Aug 7, 17 @ 11:45 am:
Corrupt. Yes indeed. I do worry about the future. The future doesn’t look to good for the working poor and middle classes. continuing drops in the states population looms in the future. The teachers pension doesn’t look to good in the future either. So yes, old Blue is concerned about the future. Especially if we continue with business as usual’ when it comes to K-12.
- Judgment Day - Monday, Aug 7, 17 @ 11:57 am:
“Is holding school funding hostage really a morally justifiable way to get TIF reform?”
————
Unknown. What I do know is that for making the type of changes to ‘clean up the swamp’ that is current day TIF, it’s going to require something that is a powerful enough ‘crisis’ to get the legislature to face down the ‘TIF monster’.
IMO, there’s just no other way.
IF the legislature doesn’t want to do it - great. They’ve made their choices.
TIF is some serious money statewide. Big time dollars.
You want to put the ‘TIF monster’ on the table, this is the way to do it. Don’t got to like it, but you are going to have to bring your own hammer to the table. IMO, this will do it.
There’s no reason for the ‘TIF Monster’ to reform on it’s own.
- Skeptic - Monday, Aug 7, 17 @ 12:16 pm:
“I think it will be awesome when the Coen Brothers show us their version of the story.” Do you mean the Coen Bros. (”Fargo”, “No Country For Old Men”, “O Brother Where Art Thou?”) or the Koch Bros.? (Wealthy Right-wing idealogs)
- A Jack - Monday, Aug 7, 17 @ 12:41 pm:
Rauner gave an interview to WBBM’s “At Issue”, about the SB1 veto. I heard it on Sunday. It was painful to listen to the way he stumbled around questions. He was promising numbers from the IBE today that would vindicate him. I haven’t seen those numbers reported by anyone yet. I suspect the numbers are as bogus as his answers to some of the questions.
- Shemp - Monday, Aug 7, 17 @ 4:50 pm:
TIF is about the only tool the State has left downstate non-home rule cities to redevelop blighted sites with. Can’t imagune why anyone who understands TIF would want it gone. Just because one large city has used it to death doesn’t mean the rest of us should be punished.
- JS Mill - Monday, Aug 7, 17 @ 5:29 pm:
@shemp- TIF’s are a plague downstate not a means to rebuild comatose small town economies. They deprive other local governments of needed revenue and generally don’t bring much new business to town save a Dollar General.
- blue dog dem - Monday, Aug 7, 17 @ 6:56 pm:
She mp. TIF’sjust aren’t fair. Why does the guy on the edge of town pay property taxes, but the guy on main street gets a break? Nobody likes taxes, but we do need certain govt provided services. I agree with JS. A plague.
- Shemp - Tuesday, Aug 8, 17 @ 12:07 am:
Try redeveloping a truly blighted site downstate. A 20 year vacant retail bldg is bad enough, but making something out of blighted industrial downstate without TIF is asking for a miracle. There are no tools left in the box here. The State isn’t about to help. You’re dooming the core of downstate cities and their empty industrial properties to permanent decay without TIF in this state.