Fallout from the budget crisis in Springfield could hit local school districts hard. At the May 17 City-Schools Liaison Committee meeting, representatives from both school districts discussed two proposed measures that could have devastating effects on local taxpayers.
Each is aimed at addressing the shortfall in the Illinois Municipal Retirement Fund pensions and would affect local school districts. One of them would also affect other local governing bodies such as the City of Evanston and Evanston Township.
“These plans are shifting by the minute as [legislators] negotiate,” said District 202 Superintendent Eric Witherspoon.
Under one proposal, the burden of paying teacher pensions would shift from the state to local school districts. If approved, that would add about $2.5 million to the Evanston Township High School budget for next year, said William Stafford, its Chief Financial Officer. The amount would be even larger for School District 65, because it is a larger district, he said.
One part of the discussion centered on a relatively new proposal from Springfield under which the State of Illinois would retain the corporate personal property replacement tax (CPPRT) – which is traditionally remitted on a proportional basis to public school districts and other public bodies. The corporate personal property replacement tax is tied to the economy, said Mr. Stafford, and tied to the amount school districts received in 1981.
“The state [would like to take] everyone’s CPPRT,” said Mr. Stafford. Glancing at City Manager Wally Bobkiewicz, he said, “They’re taking Wally’s money.”
“And the Township’s,” added Mr. Bobkiewicz.
“This is throwing a multi-million-dollar liability in our lap,” said District 202 Board member Gretchen Livingston. “On top of the pension-shifting [possibility] comes the notice that we will not get back [from the state] the amount [of the CCPRT] that should be remitted to us.
“I continue to hear that school districts should be grateful for their streams of [state] funding, but … we rely very nearly exclusively on property taxes,” she added.
District 65 receives about $3.5 million in CPPRT revenues annually, and District 202, about $2 million.
Still, said Ms. Livingston, without that money, “In the worst case, this is dumping [a] $6 million [problem] in our laps.” align=”left”>Even when remitted to the school districts, those revenues do not often come in a timely fashion, said Mr. Stafford. “The state is always $500,000 to $1.5 million behind. The uncertainty makes the budgeting process difficult,” he added.
“It stresses our ability to balance the budget,” said District 65 Superintendent Dr. Hardy Murphy.
“We didn’t create the problem,” said Dr. Witherspoon. The state did. We have faithfully sent the 9.4 percent of the earnings of our teachers to the state year in and year out.”
State Representative Robyn Gabel told the RoundTable on May 19 that legislators were still debating the issue in small groups. She said, “They want to make sure the pension [system] is stabilized for the future – and that’s fair.”
Meanwhile, state legislators continue to wrangle with an unfunded pension liability for the Teachers Retirement System of almost $43.5 billion, a mandate to cut $2.7 billion from Medicaid spending and the prospect of making severe cuts to social service spending.