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Illinois House Speaker Michael Madigan said Thursday a controversial pension solution that would require suburban school districts to eventually pick up the tab for their teachers’ retirement costs is inevitable.

“This is going to happen,” the powerful Chicago Democrat said. “There will be a new plan.”

* SJ-R…

Brent Clark of the Illinois Association of School Administrators said a district’s ability to absorb pension costs may hinge on its property tax wealth. The more reliant on state aid a district is, the less likely it can accomodate the cost shift.

“The more property wealth they are sitting on, the more likely they are to be able to manage this,” he said.

Clark also suggested that school districts be given latitude in following some state mandates. A district could determine “which ones are actually appropriate for the district or not.” That could free up money that could then be directed to pension costs, he said.

* The Question: Could you support any sort of cost-shift plan? Take the poll and then explain your answer in comments, please.

surveys

posted by Rich Miller
Friday, May 10, 13 @ 2:12 pm

Comments

Sure, with mandate relief and control of pay, hiring, firing and pension benefits and reallocation/leveling of any State school funding.

Comment by Cincinnatus Friday, May 10, 13 @ 2:15 pm
Yes, but simultaneously amend the Property Tax Extension Limitation Act (PTELL) only in regards to a school district’s pension levy and exempt that levy, not all levies or any other levies, from PTELL.

Comment by Mongo Friday, May 10, 13 @ 2:16 pm
One fact to consider is that Illinois already ranks 50th in the proportion of education funding provided by the State. If the shift means the state money goes for education, then it can be justified. If the shift is just another way the state can spend even less, then it’s a regressive plan that will widen the already wide spending disparities between rich and poor districts.

Comment by reformer Friday, May 10, 13 @ 2:17 pm
i would vote for the cost shift, but there must be some consideration given to local control over whether the district participates in the pension program and to what degree going forward.

It is not fair to these school districts to force them to participate in the pension program and force them to come up with the funding.

In tax poor districts it may not be possible to support the pensions and continue even currently abysmal educational services.

If some sort of consideration isn’t given to local choice over pension participation, these school districts will become nothing more than pension programs for retired and current teachers and administrators.

This will force the local school districts to decide how much pension/retirement benefits can be afforded by the individual district.

So yes to shift, but flexibility must be given to the local districts. It cannot be mandated by state.

Comment by biased observer Friday, May 10, 13 @ 2:22 pm
Only if the overall school funding formula was redone. I’ve read stats where the State of Illinois pays the lowest amount of state spending per pupil out of all 50 states.

That is in spite of that fact that:
“The State has the primary responsibility for financing the system of public education.”
(Source: Illinois Constitution.)

Comment by Joe M Friday, May 10, 13 @ 2:29 pm
What happens to the money the state currently controls that is used for the pensions? Does it follow the cost shift or does the state keep it? Where does that money come from? I agree that if the local folks control how big the pension is they should shoulder that extra burden should they choose to sweeten the pensions of the retiring educators. Isn’t that what this is all about?

Comment by dupage dan Friday, May 10, 13 @ 2:30 pm
Yes, if there is a rational phase in period and an adequate period of time for districts to budget and prepare for implementation.
Districts must not be given the ability to opt out of the state pension system. To do so would only exacerbate the disparities that exist between rich and poor districts when competing for the most talented and effective educators.

Comment by Bill Friday, May 10, 13 @ 2:33 pm
Yes,But with rules that can be enforced.What rules I don’t know.

Comment by reflector Friday, May 10, 13 @ 2:35 pm
I can support a “Cost-Shift” plan, as long as it’s not retro-active, where school districts planning on one thing and now having to deal with another, are not chaing their tails for years because the “Cost-Shift” was not given a year lead time, at least to budget for in the decisions of the district.

Comment by Oswego Willy Friday, May 10, 13 @ 2:36 pm
yes with a levy to pay for it. With 89% (with projected deeper cuts coming) proration of GSA, huge cuts in transportation cost, elimination of a number of grant programs over the last years, additional expenses without a revenue stream would kill already ailing school budgets. It should also be phased in over at least 12 years. It should also be coupled with the resignation of many members of the General Assembly.

Comment by Anonymous Friday, May 10, 13 @ 2:37 pm
dupage dan,

I’ve been thinking about that, too. I can envision that the current pension funds become some sort of “mutual fund” with past benefits protected and, assuming my previous post was incorporated, future contributions to the fund controlled by the district. All monies “redistributed” from State funds are in the form of “block grants” to the district which they can use as they see fit.

Comment by Cincinnatus Friday, May 10, 13 @ 2:37 pm
Yes - districts have been greatly increasing selected staff salaries the last 3 years of employment giving these staff pensions that are often well over $100,000, $125,000 and more per year in retirement - if they choose to do this then they should choose to pay. It is not so much a cost shift - but a pay your own costs.

Comment by Marie Friday, May 10, 13 @ 2:41 pm
So the funding inequality between wealthy and poor school districts will widen even further?

No thank you, Mr. Speaker.

Comment by Keep Calm and Carry On Friday, May 10, 13 @ 2:41 pm
Illinois ranks 50th in proportion of state funding for Education. Illinois is one of the wealthiest states in our country.

Comment by Anonymous 1 Friday, May 10, 13 @ 2:45 pm
Yes

As long as money going to TRS at the State level now goes to the Local District at the local level. (10.9% of salary).

Fair Share Statute forcing every Teacher to pay Union dues is eliminated.

Every District Teacher participates in Social Security at the full benefit.

Comment by Griz Friday, May 10, 13 @ 2:46 pm
Yes. Provided it is phased in gradually. And provided at least equal funding that is shifted to the schools goes back in the GSA formula. After all - this is just so there is no free lunch, it is not meant to offload the problem to local property tax payers. Right?

Comment by archimedes Friday, May 10, 13 @ 2:52 pm
- Every District Teacher participates in Social Security at the full benefit. -

The federal Social Security rules contain the “windfall” provision that diminishes the value of Social Security benefits earned by workers who also have non-covered service. Illinois lawmakers can’t control that.

Comment by cover Friday, May 10, 13 @ 2:54 pm
Kind of with OW on this, phase it in, go forward and restore state transportation funding since the cut in that really targets geographically large less dense districts…

Comment by OneMan Friday, May 10, 13 @ 2:57 pm
The state is strangling education. Do we really want a handful of legislators and lobbyists running our education system? The shift from local to state over the last 30 years has dramatically driven up costs.

Comment by Liberty First Friday, May 10, 13 @ 2:58 pm
Seems like a good argument for reforming education funding away from property taxes.

Comment by Oak Park Rob Friday, May 10, 13 @ 2:59 pm
Property taxes have caps which protect taxpayers from big jumps in taxes. School funding from the state is embarrassing low as a percentage related to the overall cost of educating the States children. These pensions are local costs made by local school boards who have had a almost free ride in paying for their employees. Cost shift is correct and fair. Future State funding of education would be freed up by this savings. Will all the cost savings be passed on in the form of increases the States funding of education…of course not! However, the freed up capital would allow for fairer funding from the State budget for all school districts. Teachers who now have their portion of pension contributions paid for by their districts would have to come out of pocket in the future and the districts will have to be much tougher when negotiating future employment contracts because of the cost of their employees retirement plans being their responsibility.

Comment by Nickypiii Friday, May 10, 13 @ 3:03 pm
I support this. The locals abused the system. They negotiated sweetners that artitifically kick up salaries right before retirmenet becuase it was spending somone elses money. If they had to come up with that cost we probably wouldnt have those. So teachers contribute to their retirement at a lower salary, then get a short salary boost which sets the amount o salary we use to figure their retirement? I think that is unfair, its not like they have been contributing all along on that salary amount.

Send it back AND require them to use the formula applid to the majority of employes, retirement salary is based on an average of your 4 highest years out of the last 10. Same for the GA, no more last day pay, base it on long time earnings.

Comment by Ghost Friday, May 10, 13 @ 3:14 pm
I’m a suburban GOPer in an excellent school district. I could support the tax shift, provided a few caveats that others have pointed out:

1) It needs to be phased in gradually. Districts have multi-year plans and budgets and asking them to shift mid-plan is not reasonable. Give them time to plan ahead.

2) If the locals are going to pay for the pensions 100%, they should have more latitude and control in how they accomplish that and what they contract with the school district employees. Giving local school districts more flexibility will produce a whole host of creative solutions over the next few years. The popular fixes will be copied by districts statewide; the bad fixes will die after one or two contract cycles.

I know lots of administrators are bemoaning the fact that especially in conservative areas, they will “run out of money.” They can either cut their budgets elsewhere to make up the difference, or ask for more tax monies through increasing a millage. If the area is so averse to higher property taxes for schools that they will NEVER pass a millage, then so be it. The citizens ultimately run the show, not the administrators.

When I hear this from administrators, basically what they’re saying is they don’t trust the parents & citizens of the school district to ‘do what’s needed.’ I guess my response is: well, you need to make the case at the polls. Or failing that, then you need to be at peace with the wishes of your bosses–the voters of the district.

Comment by John Galt Friday, May 10, 13 @ 3:15 pm
A plan from Mr. Speaker that allows Chicago and Suburbs to gain more tax dollars…NO WAY. All this shows is what is painfully evident…the time for term limits Mr. Speaker is LONG OVERDUE.

Comment by DoubleD Friday, May 10, 13 @ 3:15 pm
Yes, with several cautions–

1. State must pay the unfunded liability with school districts paying current costs which should be established as a percentage of salaries.
Overtime the state would no longer be paying for pensions, but schools should not be stuck with the costs the state failed to pay.

2. The unfunded liability should be amortized in such a way that the state can not decline to pay.

3. In the future if the state increases pensions, the state must pay the cost of that increased benefit.

4. Shift would be phased-in over at least 10 years starting no sooner than one year after enactment.

5. Money saved would increase education funding.

6. Districts would be required to participate and to pay just as IMRF employers are.

Under such a system taxpayers in low wealth districts would benefit as they are currently subsidizing high wealth districts which generally have higher salaries. If high wealth districts are overtime required to pick up the pension costs on those high salaries, it will improve education funding equity.

Comment by Anon3 Friday, May 10, 13 @ 3:51 pm
Yes, to pay normal cost, with a reasonable phase-in period.
None of this opt-out or Social Security nonsense. There are enough State legal challenges without testing Fed law on bad ideas.

Comment by Arthur Andersen Friday, May 10, 13 @ 4:01 pm
No Way! My property taxes are way too high as it is. I live in Orland Park and don’t know anyone who would support a plan that would directly increase property taxes. It’s a bad idea plain and simple.

Comment by Not my money Friday, May 10, 13 @ 4:09 pm
I voted yes because it said any cost shift plan, I could not support a 100% shift. I could support a 50% shift or some other formula that ensures school districts do not back load contracts to increase pensions.

Comment by Ahoy! Friday, May 10, 13 @ 4:09 pm