Madigan: Putting pension costs on schools 'going to happen'
SPRINGFIELD — Illinois House Speaker Michael Madigan said Thursday a controversial pension solution that would require suburban school districts to eventually pick up the tab for their teachers' retirement costs is inevitable.
“This is going to happen,” the powerful Chicago Democrat said. “There will be a new plan.”
Chicago schools pay for their teachers' pensions, and Madigan has often said suburban and downstate schools get a “free lunch” by not paying for theirs.
@$ID/[No paragraph style]:The issue was left out of the larger pension bill because of its unpopularity with suburban lawmakers, who are concerned it will eat into local school district budgets and could increase property taxes, schools' main revenue source.
“The property tax payers in this state are getting killed,” said state Rep. David McSweeney, a Barrington Hills Republican. “I am concerned that a cost shift is going to result in a massive property tax increase.”
Along with their worries about tax hikes, McSweeney's fellow Republicans, as well as some suburban and downstate Democrats, say if pension investments do not perform as expected, schools could face pension debt in their future similar to what the state faces now.
Stand For Children Illinois, an education advocacy group, estimates that if a major cost shift were implemented, school districts in Lake and Kane counties would lose between $15 and $150 per student and school districts in DuPage and McHenry counties would lose more than $150 per student.
The losses would affect districts in those counties the hardest because of their high level of property wealth and high payroll costs, which would lead to larger pension payments.
Madigan seeks to craft cost-shifting legislation separate from his pension plan that passed the House last week.
Madigan said a cost shift would put the responsibility of paying for teachers' pensions in the hands of the administrators who are already responsible for paying their salaries.
“The state of Illinois should not be paying for the pension costs of employees of local governments,” Madigan said.
State Rep. Elaine Nekritz, a Northbrook Democrat, agreed with Madigan's assertions that a cost shift is needed to solve the state's pension crisis, but she wasn't sure he'd be able to get enough lawmakers on board.
“As much as we like to think he controls everything around here, there is still the necessity of putting 60 votes on something, and we'll see whether 60 legislators are willing to support that,” Nekritz said.
Nekritz has penned several pension reforms, each of which contained a gradual cost shift and none of which were voted through either chamber of the General Assembly.