Rauner plan could charge schools bigger pension penalties
In his first two big speeches in office, Gov. Bruce Rauner has given local officials a lot to ponder, especially in the weeks before the local election.
The new Republican governor has proposed taking some of Illinois income tax money away from communities to save the state money, and two weeks ago, he said he wants to give school districts and others the budget-cutting tools needed to freeze property taxes.
Tucked away in his plan to cut teachers' pensions, though, is a detail school districts would have to be wary of should Rauner's plans become law.
Here's all it says on the list of details released publicly by the governor's office: "Eliminates spiking."
What does that mean?
Rauner wants to change a state law that makes local school districts pay penalties if they give big end-of-career pay raises to teachers and administrators.
School districts can still give the pay raises, but the state says local officials have to pay for the pension consequences.
Now, school districts have to pay penalties if they give late-career pay raises of more than 6 percent. Rauner wants to enact penalties for those pay raises if they're greater than the rate of inflation, which lately has been around 1 percent.
Suburban schools have already had to pay big bucks when they've been caught by the 6 percent law. For the 2012-2013 school year, for example, Elgin Area District U-46 had to pay $135,393.
The year before that, Schaumburg Township District 54 had to pay $489,841.
Most districts avoid big penalties, even writing in a 6 percent pay raise cap into their contracts with teachers. But 1 percent is a lot lower, of course.
"While a so-called reform was enacted in an effort to prevent pension spiking, teacher contracts in recent years have made the six percent cap a floor rather than a ceiling," Rauner spokesman Lance Trover said.
Teacher union leaders have already said they'd sue to try to block Rauner's greater pension proposal in the event that Democrats go along and make it law. And the Illinois Supreme Court has set for March oral arguments in the case of the pension cuts approved by former Gov. Pat Quinn. Unions have won the early stages of that case.
"It's totally illegal," Illinois Federation of Teachers President Dan Montgomery said. "Any savings he says he has from that is fiction."
But charging penalties for end-of-career raises of more than 1 percent or so could cause some districts some issues, so it's one of a list of Rauner proposals local officials will want to watch.
Daily Herald headline: "Suburban mayors: Don't take our income tax share."
Date: May 23, 2012.
More Breuder plans
State Sen. Melinda Bush, a Grayslake Democrat, has added another idea to the growing list of proposals sparked by the $763,000 severance package given to College of DuPage President Robert Breuder.
Her legislation would cap severance packages at 30 percent of a college president's annual salary.
"Families are struggling with the ever-rising price of higher education," Bush said in a statement. "To award nearly $1 million to an official just to quit is more than tone-deaf.