August 1, 2017

Governor AVs SB 1; now what?
As expected, Governor Bruce issued an amendatory veto (AV) of Senate Bill 1 this morning placing in limbo the funding of public schools in Illinois. The governor explained his veto by saying SB 1 diverted too much money to the Chicago Public School system and did not meet the expectations of his Illinois School Funding Reform Commission.

The amended bill now returns to the Senate, which has 15 days to either uphold the AV or override the AV. Following action by the Senate, the bill then will move to the House, which will have 15 days to either agree or not with the Senate action. SB 1 will die if either chamber fails to uphold or override the AV within the statutory 15-day timetable.

While it is clear that an override will require a 3/5 supermajority (36 votes in the Senate and 71 in the House), there was some confusion regarding how many votes it will take to uphold the AV. The governor said it would require only a simple majority (30 and 60), but Senate President John Cullerton has said it will require a supermajority because the final action on SB 1 did not occur until after May 31 and includes an immediate effective date.

Either way, as things stand today, it appears unlikely that the votes are there (especially in the House) to uphold or override the AV. And, while the governor said negotiations were still continuing this morning, we are aware that those talks have broken down.

When this crisis will be resolved now becomes as big a question as how it gets resolved. The clock is loudly ticking toward August 10, the date when the first state aid payments to schools are due. Many schools are scheduled to open the week of August 21. The Senate Democrats have said they cannot get all of their members to the capitol until August 13.

IASA's position is pretty simple: A solution must be reached sooner rather than later by the General Assembly. The devil is always in the details and at first reading there are some changes in the AV that we could support and some that will have a negative impact on school districts.

The options are to either override the AV, accept the AV or reach a compromise solution. If none of those three options happen, the entire bill would die and there would be no mechanism by which the state could distribute school funding -- even though a budget has been passed that includes $350 million additional dollars for schools. That could leave some school districts in jeopardy of not being able to open on time and most districts would be in the difficult position of being able to stay open only for a portion of the school year.

The governor's AV made nine changes to SB 1, including:

1) Maintaining the per-district hold harmless until the 2020-21 school year and then moving to a per-pupil hold harmless based on a three-year rolling average of enrollment. The per-student hold harmless was part of our original evidence-based model that arose from the Vision 20/20 initiative.

2) Removing the minimum funding requirement of 1 percent of the overall adequacy target plus $93 million. This provision potentially cheapens the state's future commitment to public schools.

3) Removing the block grant from CPS. This creates a red number for CPS.

4) Removing the CPS pension payment, including both the normal cost pick up and the unfunded liability deduction. We generally agree with the changes in #4 and #5.

5) Reintegrating the pension normal cost payment to CPS in the Pension Code.

6) Eliminating the PTELL and TIF equalized assessed value subsidies. This needs more study to determine the actual impact.

7) Removing escalators in the bill that increase costs. Similar to #2, this could mean less money in the future years' calculations for districts.

8) Removing from the adequacy target the accommodation for future employer normal pension cost shifts to school districts. This leaves all downstate districts vulnerable to a normal pension cost shift with no way to help pay for it.

9) Returning to the floor for regional costs and adding a cap for those costs. Same as #s 2, 6 and 7, this would slow the process of the state's poorest districts moving toward adequacy.

We are still in the process of going through the AV line by line to try and determine the impact the changes might have short- and long-term for school districts. As mentioned above, we certainly would support removing the CPS pension payment from SB 1 and placing it in the Pension Code. Our original, pure evidence-based model did not contain the pension payment to CPS.

The bottom line for us remains replacing the most inequitable school funding plan in the nation with the evidence-based model AND holding all districts harmless. We still believe that there is enough common ground between both political parties to reach an agreement that accomplishes both of those major objectives.

It has almost become a mantra at this point, but it is critical that our members continue to reach out to legislators to urge a quick resolution to this matter so we can get back to fulfilling our most important mission of providing the best educational opportunities possible for the more than 2 million schoolchildren in our state.

Diane L. Hendren
Director of Governmental Relations 
Illinois Association of School Administrators