Democrats, Republicans say a tentative deal reached on school funding


Nancy Stone | Chicago Tribune

Gov. Bruce Rauner gives a thumbs up after giving his first speech as governor on Monday Jan. 12, 2015 at the Prairie Capital Convention Center in Springfield, Ill. (Nancy Stone | Chicago Tribune)

The four Democratic and Republican legislative leaders said Thursday that they have reached a tentative agreement with Gov. Bruce Rauner on a plan to fund schools, though the sides warn a deal is not yet final.

The leaders recently held several closed-door meetings in search of a compromise after the Republican governor vetoed Democrats’ plan to change the way state money is distributed to local school districts. Rauner said the bill unfairly benefited the financially struggling Chicago Public Schools, and he rewrote it, setting up a standoff with Democrats.

Top lawmakers were unwilling to discuss the details Thursday before the agreement is formally written into a bill that can actually be voted on, as it can fall apart if one side doesn’t think the technical language of the legislation accurately reflects what was agreed to in private.


Talks, though, have included a variety of issues, including letting some schools stop offering daily physical education classes and letting CPS raise property taxes above a state cap. Asked if the tentative deal included all the funding increases for CPS that were in the original Democratic bill, Mayor Rahm Emanuel responded, “That and more.”

News of the breakthrough broke late Thursday afternoon in a short statement issued by House Republican Leader Jim Durkin of Western Springs and incoming Senate Republican leader Bill Brady of Bloomington.

“This afternoon, the four legislative leaders and the governor reached an agreement in principle on historic school funding reform,” the statement read.

That was soon followed by a statement from Democratic Senate President John Cullerton and House Speaker Michael Madigan. The pair of Chicago Democrats said “the legislative leaders appear to have reached a bipartisan agreement in concept.”

The legislative leaders are set to meet again in Springfield on Sunday. If the agreement stands, the House could take up the measure when lawmakers return to the Capitol on Monday. If not, that runs up against the deadline to attempt to override Rauner’s veto — though it’s unlikely there would be enough support to do so.

Rauner’s office issued a statement saying the governor “applauds” the leaders for reaching a consensus.

“He thanks them for their leadership and looks forward to the coming days when the legislation is passed by both chambers,” the statement said.


Without a new funding formula in place, the state can’t send checks to schools. Districts already have missed two regular payments and warn of major program cuts or closures should a resolution not be reached.

According to lawmakers of both parties familiar with talks, much of the underlying bill before Rauner’s rewrite would remain intact. The legislation is designed to help direct more money to impoverished schools but without taking dollars from other districts.

Discussions have included giving CPS the authority to raise its property tax levy above a state cap, which limits an increase to 5 percent or the rate of inflation, whichever is lower. The state granted similar power last year, paving the way for a $250 million tax increase to boost contributions to the CPS teacher pension fund. The state also has given CPS the authority to levy an additional property tax, the proceeds of which are meant to be spent on construction projects.

In addition, a new program would be created to provide tax credits for those who donate money toward scholarships for private schools. Under the plan, $75 million a year would be set aside, and participants could qualify for a tax credit of 75 cents for every dollar that is donated. The program would expire in five years.

The idea has drawn criticism from unions.

“Rahm has failed to secure revenue at both the city and state levels, and is now supporting a plan that will give money to private schools that could be directed to our public school classrooms,” Chicago Teachers Union President Karen Lewis said in a statement earlier this week.

CPS also would receive help in the form of the state picking up costs related to teacher pensions, which Illinois already covers for school districts outside the city. However, that change might not be written into the school code but instead included with laws governing the state’s retirement systems — reflecting a change Rauner wanted.

Meanwhile, voters in school districts with a surplus of education money may be allowed to determine via a referendum if they want to cut property taxes. This would apply predominately to communities in the suburbs and collar counties, and a decrease would likely be limited to no more than 10 percent.

Another possible change would require the property value in any new TIF districts to be counted toward a school district’s ability to generate property taxes. It’s a nod to an issue pushed by Rauner, who has contended that Chicago is using a large number of TIF districts to hide property wealth and is therefore getting more than its fair share of state money.

Also on the table is rolling back various requirements the state has for local districts that it doesn’t help pay for. Among them is the state’s requirement for daily physical education classes and driver’s education courses. Lawmakers also could streamline the process for districts to get waivers from the Illinois State Board of Education to get out of those requirements.

At a hastily arranged news conference at City Hall on Thursday, Emanuel was asked by a reporter if Chicago taxpayers, after seeing record property tax increases in the past couple of years, should prepare for more. “Yes,” the mayor said.

Afterward, mayoral spokesman Matt McGrath sought to clarify the mayor’s statement, saying that the “yes” response was an acknowledgment of the increased property tax burden already faced by city residents, not that they would face more.

“We are not announcing a tax increase today,” McGrath said. “He was not responding to that question.”

Whatever the mayor meant, he pivoted from the tax talk to praising an agreement he said would see the state provide significantly more funding to CPS, particularly in pension contributions.

“I think they were hit hard a long time ago,” Emanuel said of Chicago taxpayers. “When you’re paying for everybody else’s teacher pension and you don’t get anything back, and for the first time you’re money’s coming back to your 606 ZIP code, I think that’s a big step forward. … We have actually gotten our Chicago taxpayers a fair shake for the first time from Springfield.”

Despite that praise, the district still needs to borrow more than $1.5 billion to have enough cash to pay its bills this year.

The Chicago Board of Education, in addition to taking up the school district’s $5.7 billion budget “framework” on Monday, also is expected to authorize borrowing slightly more than $1.9 billion worth of short- and long-term debt.

That includes close to $1.6 billion worth of tax anticipation notes — a maneuver akin to a payday loan because the district borrows cash off the value of property tax money that eventually will arrive in its coffers.

This year, that borrowing alone is expected to carry massive interest costs of roughly $79 million.


(c)2017 the Chicago Tribune

Visit the Chicago Tribune at

Distributed by Tribune Content Agency, LLC.