August 1, 2017

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Governor Bruce Rauner Tuesday morning made revisions to SB 1 through use  of an amendatory veto. The broad gubernatorial power that is authorized in the Illinois Constitution allows a governor to amend legislation that has been approved by the legislature and send it back to the General Assembly to consider his changes. The Senate today read the veto message into the record thereby starting the clock on the constitutional time limit to take action. The Senate must act within 15 days. The sponsor can file a motion to accept the Governor's changes, or to override the veto.
SB 1 contains a new evidence-based funding formula for the distribution of the bulk of State funding for schools. The appropriations bill enacted in July states that funds may only flow to schools in Fiscal Year 2018 if an evidence-based funding model is in place.
What's Next?
Both the Senate and House of Representatives have adjourned without setting a date to return to the Capitol. Though reports late yesterday and this morning indicated that talks had broken down among the legislators involved in negotiating a school funding compromise, all sides have vowed to continue working towards an agreement. Pressure is mounting due to the prospect of not having a funding stream in place for elementary and secondary schools as the new school year is about to begin.
The legislature can accept the Governor's changes to SB 1 and the bill will become law as revised; or it can override the Governor's veto and the bill will become law as originally passed. Either one of these motions would require a 3/5 majority vote for approval. If a motion would fail, or if no action is taken, SB 1 in its entirety would be dead.
If an agreement is reached, the compromise language could be amended onto a completely different bill, or set of bills. In that case, no action would need to be taken on SB 1.
What is on the Table?
Other than those in the negotiating room, no one knows for sure what is being discussed. Obviously, how Chicago Public Schools (CPS) are treated in a new funding formula is key. The Governor eliminated language that continues a block grant for CPS and also took out provisions that make CPS pensions part of the funding formula.
Other items that could be part of the mix are provisions to provide mandate relief for public schools. Legislative language for mandate relief provisions drafted by the Alliance is reportedly part of the discussions.
Provisions to create new private school vouchers or tax credits are also rumored to be part of the discussions. Exact language is not available, but the Alliance strongly opposes any provision to send public school dollars to non-public schools.
What Did the Amendatory Veto Include?
Here are the revisions, according to the Governor's Veto Message:
"A number of changes to this bill are needed to return PK-12 funding reform to the original spirit of the Commission and its commitment to promote equity and adequacy statewide. The first change will maintain a per-district hold harmless until the 2020-2021 school year and then move to a per-pupil hold harmless based on a three-year rolling average of enrollment. The second change will remove the minimum funding requirement; while I am committed to ensuring that the legislature satisfies its duty to fund schools, the proposed trigger of one percent of the overall adequacy target plus $93 million artificially inflates the minimum funding number and jeopardizes Tier II funding. The third change will remove the Chicago block grant from the funding formula.  The fourth change will remove both Chicago Public Schools pension considerations from the formula: the normal cost pick-up and the unfunded liability deduction.  The fifth change will reintegrate the normal cost pick-up for Chicago Public Schools into the Pension Code where it belongs, and will finally begin to treat Chicago like all other districts with regards to the State's relationship with its teachers' pensions. The sixth change will eliminate the PTELL and TIF equalized assessed value subsidies that allow districts to continue under-reporting property wealth. The seventh change will remove the escalators throughout the bill that automatically increase costs. The eighth change removes the accounting for future pension cost shifts to districts in the Adequacy Target. This provision would prevent districts from ever fully taking responsibility for the normal costs of their teachers' pensions. The final change will retain the floor for the regionalization factor, for the purposes of equity, and will add a cap, for the purposes of adequacy."

This legislative report was written and edited by the lobbyists of the Illinois Association of School Boards to provide information to the members of the organizations that comprise the Statewide School Management Alliance.