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June 22, 2016

One thorny issue that's emerged in the ongoing battle over the state's budget — or more precisely the lack thereof — involves the bailout of Chicago. Recently, Governor Bruce Rauner and many of his strongest Republican supporters in the General Assembly have made it a point to urge voters who live in central and southern Illinois, and the legislators who represent them, to "stand up against the Chicago political machine" and refuse to allow their tax dollars to be used "to bailout the City of Chicago." Superficially, this message most likely resonates with many who live in the communities where it gets delivered.

Indeed they've probably come to expect hearing it during an election year, given that for generations, Democrats and Republicans alike have tried to gain political advantage by pitting "downstate" against Chicago.

The problem is the current rhetoric about the Chicago bailout, just like the vast majority of past attempts to pit downstate Illinois against Chicago, creates a false dichotomy that ultimately encourages legislation counter to the interests of downstate communities. Understanding why this is the case, requires an understanding of what the dreaded "Chicago bailout" actually entails. The key element of the proposal involves providing some financial support to Chicago Public Schools, by having the state cover all or a portion of the "normal pension cost" — that is, the employer cost of future retirement benefits — currently being earned by CPS teachers.

Many of you are probably wondering why state tax dollars collected everywhere from Rockford to Marion, should be used to cover the normal cost of pension benefits being earned by teachers in Chicago. Well, first and foremost, because Illinois already pays the normal cost of pension benefits earned by teachers in every school district statewide except Chicago. That's right, CPS is the only school district that has to fund its own normal cost.

Of course, this also means Chicago taxpayers foot the full pension bill for CPS teachers, while also chipping in to cover a portion of the pension benefits being earned by teachers in Rockford, Marion, Winnetka — heck, you name it. And lest you think that contribution isn't significant, Chicago residents alone account for roughly 20 percent of all income tax revenue collected statewide. So, the proposal isn't so much a bailout — but rather an attempt to put CPS on equal footing with every other school district. Accomplishing that requires that either some of the state-based revenue already being paid by taxpayers across Illinois gets used to cover CPS normal costs, or the state stops paying the normal cost for every other school district in Illinois. If that latter option is chosen (and yes, legislation to do so has been introduced) it will force school districts statewide to cover this new payment obligation by either raising property taxes or cutting spending that goes into the classroom. Hard to see how either of those scenarios would be beneficial downstate, given Illinois already relies more on property taxes to fund schools than any other state in America.

Far more beneficial for downstate communities would be reforming Illinois' education funding policy to make it less reliant on local property taxes; adequate in amount to fund those research-based practices which have been shown to enhance student achievement over time; and equitable in distribution, thereby ensuring low-income children receive the level of investment needed for them to achieve. Here, the interests of downstate communities and CPS are completely aligned. See, as it turns out, 32 percent of all low-income students in Illinois attend downstate schools — that is, schools located in areas other than Cook and the Collar Counties. Coincidentally, CPS is home to 32.7 percent of Illinois' low-income students. Which means voters who live downstate, and the legislators who represent them, would be better served by working arm-in-arm with their Chicago counterparts — to accomplish meaningful education funding reform — even if it includes the horribly misnamed Chicago "bailout."

Source: State Journal Register