Gov. Bruce Rauner on Tuesday followed through on his promise to veto a school funding bill, taking aim at hundreds of millions of dollars in help for cash-strapped Chicago Public Schools.
The Republican governor, long a critic of CPS' leadership and the Chicago Teachers Union, rewrote the measure to strip out more than $200 million in grant money, penalize the district for its declining enrollment and make it appear wealthier in a complex new formula that determines how state school aid is distributed. And while Rauner left in $221 million in CPS pension help, he did so with a big string attached.
In unveiling his amendatory veto, Rauner tapped into a regional divide that has long seen Chicago pitted against the suburbs and Downstate. The governor argued that portions of the legislation that would benefit CPS amount to a "diversion" of hundreds of millions of dollars away from other schools, "unfairly hurting children across the state and unfairly advantaging one school district."
"There's an attitude that Chicago is the only community that has low-income students. This is false. Chicago is the only community that has English language learners. That's false. That Chicago is the only city with minority students who are disadvantaged students. That's false," Rauner said at a news conference in his Capitol office. "We have those children all around the state, and they all deserve to be treated fairly."
Democrats ripped Rauner, saying he's trying to play communities off one another to get re-elected next year and contending his veto raises the possibility that all districts may begin the school year without state funding.
"The only thing the governor's action advances is his own personal brand of cynical politics," Mayor Rahm Emanuel said. "It is well past time for Gov. Rauner to stop playing politics with our children's futures, start demonstrating leadership and ensure a child's education isn't determined by their ZIP code or his political whims."
Next steps
Rauner's veto sets the stage for weeks -- and potentially months -- of uncertainty, kicking the issue back to Democrats who control the General Assembly. The Senate now has 15 days to consider the veto, then the House gets another 15 days. If lawmakers don't agree with the changes or overturn them, the legislation dies and the comptroller's office will be unable to send schools their state aid payments until a compromise is reached.The first checks are scheduled to be sent by Aug. 10. If that deadline is missed, it's unlikely many schools would be unable to open. However, some districts may have to cut back on programs, borrow or tap into reserves.
The stakes get higher as the days tick off the calendar, with pressure rising on lawmakers to do something to avoid angering parents who wouldn't be able to send their children to class while they go to work should schools close.
Some Democrats already have raised concerns about whether Rauner's changes go beyond the scope of what's considered constitutional for an amendatory veto.
Democratic House Speaker Michael Madigan, who helped write the 1970 Illinois Constitution, historically has taken a dim view when he thinks governors have overreached with an amendatory veto, citing a separation of powers. While Madigan in the past has declined to take up such legislation, the risk in not doing so this time is that the governor could blame him for schools not being funded.
Asked about Rauner's veto Tuesday, Madigan spokesman Steve Brown said he doesn't "know that the analysis has been concluded on that. That'll be an element of what goes on, and we will look to see what the thoughts are and what happens with some of the advocacy groups."
If legislators want to go along with Rauner's veto, they would need an extraordinary majority of three-fifths in the House and Senate. Speaking to reporters Tuesday, Rauner said it would require a simple majority. Later, a Rauner spokeswoman acknowledged the governor was mistaken.
Democrats held onto the bill for two months, sending it to the governor Monday, so now it will take 71 votes in the House to agree or override, and 36 in the Senate.
The math presents a political challenge. There are 37 Senate Democrats, more than enough to overturn Rauner. But there are just 67 in the House, meaning they must find Republican lawmakers to help like they did last month to override Rauner's vetoes of a tax hike and budget. Failing that, lawmakers would have to negotiate a new education funding plan with the governor.
"It's going to take some time, and the governor's actions today are going to extend the time that it takes to solve this problem," said Sen. Andy Manar, a Democrat from Bunker Hill who is a key negotiator.
Rauner's complicated amendatory veto is still being sorted out at the Capitol. Asked about the details, Rauner referred reporters to a website where his office had posted figures demonstrating how districts might benefit. That site was unavailable to the public on Tuesday, however, because it required a password.
Rauner's changes
While it's unlikely the governor's changes will become law as is, his rewrite gives some indication of the wish list Rauner will bring to the negotiating table as talks continue.Among them:
--Hold harmless. Under the bill lawmakers approved, no school district would receive less than it did last year. New money above the $5 billion the state is supposed to pay out would first be sent to schools most in need.
Rauner would keep that so-called "hold harmless" provision in place until the 2020-21 school year, then switch the way funding is calculated from a per-district basis to a per-pupil basis. The upshot is that CPS and some Downstate districts that have seen declining enrollments stand to lose money.
CPS enrollment has declined precipitously the past five years amid a long decline in the city's birth rates, and also families moving out of Chicago or sending kids to private schools. Roughly 404,000 students were enrolled at CPS in the fall 2012, a figure that fell to 381,000 by fall 2016 and is expected to drop by 8,000 more this year.
Rauner also wants to strip out most of a $250 million block grant CPS has long received to pay for things like transportation and free meals, though he would retain a portion that covers bilingual education.
--Pension money: The governor says he supports the state covering CPS' "normal" pension costs, which the state already picks up for districts outside Chicago, along with added money to pay down debt, an option not being offered to the city. Under the governor's proposal, that tab would start at $221.3 million, with number crunchers figuring out future amounts.
That's not far off from what what lawmakers approved. However, Rauner wants to take the pension payment out of the education bill and put it into a new piece of legislation -- a process that includes its own political hurdles.
In addition, covering the normal costs does not include what's needed to eliminate debt to the Chicago Teachers' Pension Fund caused by the district skipping and skimping on contributions and making faulty assumptions about investment earnings and benefit payouts.
--Property wealth: Under the bill, extra education funding dollars would be distributed according to what's known as an "evidence-based" model, which uses 27 metrics and regional-based salary differences to determine an "adequacy target" -- an overall dollar figure each school district should spend per student to provide an adequate education.
To help reach that figure, the formula calculates how much each district can contribute in property taxes. That "local capacity" figure is added to the amount of state aid each school district receives, and the formula then distributes the new money needed to reach the adequacy target.
Rauner's amendatory veto would change the way so-called local capacity targets are calculated when dividing up new state education spending, starting with $350 million in additional funding this year.
Under Rauner's proposal, the amount of property value within a district could no longer be reduced based on two factors that limit districts' ability to levy taxes: the property tax cap law that limits tax increases and the amount of property each district has in special tax increment financing districts.
Chicago has a lot of TIF districts, and the governor including them in the formula would make CPS "artificially" appear closer to having adequate funding, said Ralph Martire, executive director of the liberal Center for Tax and Budget Accountability.
"CPS would have to tax itself locally and raise this revenue that it currently does not have access to," Martire said. "If CPS actually wants to have adequate resources to educate its kids, the governor's approach would force it to pass a significant increase to its property tax, well over and above what it currently is."
In the end, CPS "might get next to nothing from the new funding stream," Martire said. CPS did not provide an estimate Tuesday of how Rauner's changes would affect the district's bottom line.
The politics
By bashing the Chicago funding component as the reason for the amendatory veto, Rauner is using the time-honored politics of regionalism in playing to Downstate and suburban voters. To win re-election, he will need heavy support from those two Republican-leaning areas to counteract the typically large Chicago Democratic vote.The longer the issue goes unresolved, the more Republican lawmakers could feel the squeeze to support an override of their governor. Indeed, Democrats warned their GOP counterparts Tuesday to take a good look at the governor's changes, saying smaller Downstate and suburban districts may end up as "collateral damage" in his crusade against Chicago.
Democrats are likely to respond to Rauner's attacks on CPS by pounding a simple theme: The governor vetoed state funding for local schools. That leaves Rauner with a potential counter-argument: he vetoed an earlier income tax increase pushed by Democrats, who then overrode it to help send more money to Chicago.
Following the veto, several Democratic candidates for governor accused Rauner of vetoing the legislation for political reasons.
Businessman Chris Kennedy said Rauner "chose political games over our children," and state Sen. Daniel Biss of Evanston said the governor has "proven that he cares more about his own political future than the future of millions of children across Illinois."
J.B. Pritzker accused Rauner of being "blinded by his crusade against Chicago's children and families" while Northwest Side Ald. Ameya Pawar said the governor was trying to divide the state by traveling Downstate to contend that "people in Cook County and Chicago get more than their fair share."
Still, Rauner said he was prepared to once again take his message on the road, vowing to continue his travels throughout the state to talk up his rewrite of the bill. Even as he spelled out how his veto would mean more money for schools outside Chicago, he defended his changes.
"My amendatory veto is an improvement for Chicago classrooms, for Chicago's low-income families, over the existing funding formula that's been in place for years," he said.
Chicago Tribune's Juan Perez Jr. contributed.
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