Schools pay for teacher pensions? They say no
But some people, even unions are willing to discuss it
SPRINGFIELD -- Top Illinois Democrats are thinking about shifting billions of dollars in teacher retirement costs onto local schools to help save the state's crippled finances, but suburban education officials say they don't have any room in their budgets, either.
Suburban officials say they can't afford picking up the state's share as many suburban districts already max out their property tax levies and lawmakers in Springfield have cut money for buses and other programs.
"All that burden is already coming back on the local districts," said Grayslake Elementary District 46 Superintendent Ellen Correll. "We just can't take it anymore."
But as lawmakers have gridlocked over other attempts to reduce public pension costs, Sen. Susan Garrett thinks shifting costs locally is at least worth debating.
"It gives the school districts and universities ownership of this issue," said Garrett, a Lake Forest Democrat. "It's definitely a worthy discussion."
Last week, Gov. Pat Quinn's budget office said they're weighing the idea, and House Speaker Michael Madigan said at an Elmhurst College speech Jan. 24 that he, too, is open to the idea, stating the need to evaluate Illinois' practice of funding pensions for local teachers and university employees.
And Senate President John Cullerton suggested a similar plan last year, where local districts would pick up the costs of a teacher's future pensions, with increased costs to schools being phased in over time.
He said at the time school boards need to contribute substantially because they determine pensions by deciding salaries.
They argue that Chicago schools already handle their pension costs locally, but the state helps pay for downstate and suburban schools.
"Everyone who has employees in the pension system should contribute something to the pensions," Quinn said.
But if suburban schools' budgets are tapped already, teachers could be forced to pick up the tab themselves.
"It's either going to affect school districts who don't have the money to absorb those costs," said Elgin Area Unit 46 spokesman Tony Sanders, "or it's going to affect the teachers who will have to pick up an increase on their paychecks for their pensions."
A spokesman from College of DuPage said if the plan were to become law, it would create an annual cost of about $17 million, which could require an increase in local property taxes to cover the additional costs.
Shifting pension costs to local government would be a different way for lawmakers to reduce pension costs to the state from the more common way they've been talking about doing it -- reducing future pension benefits for current teachers.
The idea is still in its infancy, and as a result, some districts contacted about it, including Maine Township School District 207 and Indian Prairie School District 204, didn't want to comment yet.
Last fiscal year, the state paid $2.1 billion into the Teacher Retirement System and about $352 million into the State Universities Retirement System.
School districts now kick in about 1 percent of a teacher's salary toward retirement, and a teacher contributes 9.4 percent. But districts, through negotiation, sometimes pick up some or all of a teacher's share, too.
Cullerton has suggested that if pension costs were sent to local schools, suburban districts would have to pay more than downstate ones. Suburban teachers are paid more by comparison, and bigger salaries mean bigger pensions and pension costs.
There is no legislation addressing the idea, and officials in Quinn's office have said it is merely being evaluated as an option.
Concerns over pension costs rose again recently when a report by the Chicago-based Civic Federation showed the state's unpaid bills could rise to $34.8 billion by 2017 unless lawmakers rein in pension and Medicaid costs.
Still, finding support could be difficult -- especially in an election year.
"I don't think that would be a very good idea," said Rep. Tom Morrison, a Palatine Republican.
Lawmakers like Morrison want to instead reduce the future pension benefits of working teachers, a proposal that has been met with gridlock in Springfield.
Teachers say their pensions shouldn't be cut just because the state hasn't been financially responsible enough to pay what it owes.
Unions, who might have to bless any eventual pension fix before political support can be found, haven't yet said "no" to shifting costs locally.
While a spokesman for the Illinois Federation of Teachers union said they share some concerns about the burden the plan could put on local schools, they are open to negotiate if teachers are included in the process.
"We're not closing the door on anything at this point," said spokesman David Comerford.
In the meantime, schools begin planning their budgets soon as lawmakers continue the debate in Springfield.
"Anything the state does to increase the costs to local school districts is again going to affect the classrooms," Sanders said.
"Larger class sizes and fewer opportunities for kids."
• Daily Herald State Government Writer Mike Riopell contributed to this report.