Governor’s Budget Address

Gov. Rauner gave his Fiscal Year (FY) 2018 budget address on Wednesday, Feb. 15.

Although the governor did not offer any specifics, he did state that education was a high priority. Consistent with that message, Gov. Rauner said he was offering a budget with full funding for General State Aid at the $6,119 level. He also addressed the need for full-funding for regular and vocational transportation. For higher education he said he supported an increase of 10 percent in funding to MAP (Monetary Assistance Program).

Despite those few highlights, there were a number of education cuts that the governor failed to address specifically. The result is a budget that is nearly $4.5 billion out of balance. The governor expressed hope the proposals in the senate package of bills would make up the difference. We will see.

FY18 Budget
The budget proposed called for spending of $37.3 million based on projected revenues of $32.7 million for FY18.

PreK-12 Education
The governor proposed a state General Revenue Fund (GRF) appropriation of $7.7 billion to the Illinois State Board of Education for PreK-12 education, which is an increase of $262 million in GRF over FY17. Appropriations include:

  • Fully funding General State Aid at the current foundation level.
  • $145 million increase in regular/vocational transportation which will end proration.
  • $38 million increase for bilingual education which will end proration.
  • $50 million increase in the Early Childhood Block Grant which is in keeping with the commitment the state has made to leverage additional federal funding for early childhood education.
  • $5 million investment for district broadband expansion in order to leverage federal funds for technology.

Higher Education
Gov. Rauner proposed a $1.8 billion higher education budget, which is inclusive of community colleges, the Illinois Student Assistance Commission, individual universities and the Illinois Board of Higher Education. Appropriations include:

  • $1.08 billion to individual universities, which is equal to about 90 percent of the FY15 funding levels.
  • $363 million to the Illinois Community College Board, which includes $221.7 million to individual community colleges through the base equalization grant.
  • Performance based funding for both individual universities and community colleges which, according to the governor’s budget, “moves the state towards a funding model which recognizes the differences between each university rather than funding them all the same.”
  • A 10 percent, or $36 million increase in MAP grants for low-income students which can provide more than 12,000 additional grant awards.

In his budget, the governor proposed sweeping cuts to the pensions of active educators that participate in the Teachers’ Retirement System (TRS) and the State Universities Retirement System (SURS).  His proposal mirrors the recently failed SB 11, sponsored by Senate President Cullerton (D-Chicago).  The legislation failed in the Illinois Senate by a vote of 18-29-10.  The legislation and the governor’s proposal would force current active employees that participate in TRS and SURS to choose between either giving up their 3 percent compounded retirement cost of living adjustment (COLA) to allow for future salary increases to continue to be pensionable, or keeping their COLA while future salary increases would not be used to calculate their future pension annuity.

The IEA, along with the We Are One Illinois Coalition, are firmly opposed to this proposal and believe these changes would be ruled unconstitutional as was the 2013 pension cutting bill, SB 1.

IEA is Protecting Funding for TRS, SURS and the Teachers’ Retirement Insurance Program (TRIP/TRAIL)
In the governor’s budget proposal he listed reductions to the required appropriations to TRS and SURS, and completely eliminated funding for TRIP/TRAIL.  It is important to note that while the governor proposed reductions to TRS and SURS, along with the complete elimination of funding for TRIP/TRAIL, this is actually the third budget proposal in a row that he has made these types of budgetary proposals. The IEA is firmly committed to ensuring that the State meets its full funding obligations to these three items and will fight to protect the State Pension Funds Continuing Appropriations Act from being changed, since it requires the State to fully fund these three very important items regardless what the budget contains.  The IEA has been successful at beating back these dramatic funding cuts in the past and will continue to work to do so moving forward. 

Action is Needed
There has been a discussion about shifting the normal cost of pensions for TRS and SURS. The governor’s proposed budget included a provision that would shift pension costs from the state onto suburban/downstate school districts, universities and community colleges statewide. IEA is firmly opposed to this idea since it will further erode educational opportunities for students by diverting local dollars away from classrooms.

Help the IEA defeat this proposal by asking your state representative to co-sponsor HR 27 (McSweeney, R-Cary) and HR 38 (Skillicorn, R-Crystal Lake). Your local legislators contact information can be accessed here.  Click here to view a fact sheet for these resolutions. A Senate resolution opposing the pension cost-shift will soon be introduced.

Bills Introduced but not Assigned to Committee
SB 1719 (Biss, D-Skokie) / HB 3393 (Welch, D-Westchester) imposes a privilege tax for hedge fund managers and private equity traders. PreK-12 education would receive $437 million from the tax revenue.

HB3522 (Martwick, D-Chicago) establishes a clear and increased funding stream for K-12, higher education and pensions through the resetting of sales, property and income taxes.

HB 3871 (Martwick, D-Chicago) provides that during times of fiscal distress the comptroller should prioritize education and human services payments ahead of financial services.

Important Dates
Mar. 17 – Bills out of Committee (Senate)
Mar. 31 – Bills out of Committee (House)
Apr. 28 – 3rd Reading deadline (both chambers)
May 12 – Deadline for House bills to get out of Senate Committee
May 19 – Deadline for Senate bills to get out of House Committee
May 26 – Final 3rd Reading deadline (both chambers)
May 31 – Adjournment

A schedule for each chamber can be found on the General Assembly website.

Legislative Committees
IEA Government Relations staff track education, revenue, pensions and labor bills through a variety of committees in the General Assembly. A list of the House and Senate Committees and members can be found on the General Assembly website.

Next Week:
The House will next be in session Wednesday, Feb. 22, when we anticipate legislative hearings to begin in earnest. To be connected to the latest information, “like” IEA on Facebook, follow IEANEA on Twitter and bookmark the IEA website.