Rauner vetoes put governments in suburbs on notice
Some suburban school districts say a property tax freeze “compromise” Gov. Bruce Rauner offered as he vetoed the state budget, though scaled back, would hurt education and leaves them in the dark as the legislative impasse over spending drags on.
Rauner also reiterated he wants to change the way the state divvies up funds for schools, a controversial concept in recent years that has had some suburban schools upset because they'd lose money.
A new way of allocating state education funds would take effect in 2017, Rauner, a Republican, said in an essay explaining his veto Thursday of the budget approved by the Democrat-majority legislature.
The governor's interest in using local government issues as bargaining chips in the ongoing fight over the state budget means suburban leaders face plenty of uncertainty. Rauner's veto leaves Illinois without a budget to replace the one that ends Tuesday. Spending for some state services would end shortly after that.
But while proposing a local property tax freeze that would hit schools the hardest, Rauner also signed the schools budget this week to prevent the potential state shutdown from affecting schools.
Rauner said he's eyeing local police and firefighter pension changes in the budget talks as well, something sought by many suburbs. He's opposed cutting public safety employees' benefits in the past but suggested Thursday the state could give suburbs longer to pay for the costs, making the yearly payments lower.
But Rauner said the pension changes, unlike the property tax freeze, aren't a must-have before he signs a state spending plan.
Rauner's proposal would freeze for two years what local governments can ask from taxpayers. He recently has pushed for a freeze that would keep local governments from ever raising taxes without voter approval, though his initial tax freeze proposal in February set a two-year limit.
“Now, in the spirit of compromise, we are willing to shorten the freeze portion of our proposal to two years,” Rauner said.
Huntley District 158 board member Tony Quagliano said costs would rise even if tax revenue does not. The district is negotiating a teachers contract and the pay raises being asked for won't be zero.
“Far from it,” he said. “We're out in the dark right now as to what's going to happen state-budget wise.”
A spokeswoman for Elgin Area School District U-46 said officials will have to see details. But CEO Tony Sanders recently spoke at an Illinois Senate hearing against a tax freeze and has said it could cost as much as $5 million per year.
“We've been looking at options to minimize tax increases,” spokeswoman Mary Fergus said.
The state loses most of its legal authority to spend money after June 30, putting Illinois' ability to make its midmonth state payroll in question.
Rauner wants widespread changes to state law to help improve Illinois' business climate. With top Democrats interested in a state tax hike to fill Illinois' budget hole, Rauner has said he won't talk about one unless lawmakers agree to some of his proposals.
Hoffman Estates Mayor Bill McLeod said Rauner's local pensions proposal would help in the short term, but not as much as benefit cuts.
“It's got to be paid eventually,” he said.
Mayors have spent most of the year protesting Rauner's initial budget plan to cut what their towns get in state income taxes in half. But that idea never gained traction, and Rauner's vetoes don't affect those payments, leaving mayors as big winners in the state budget impasse so far.
But the governor's veto means he and lawmakers will have to come up with a new plan.
McLeod said Rauner's latest proposals are better than the previous ones for his village, which he said already decided to freeze what it asks in property taxes for a year.
“Three years is better than permanent,” he said.
The ups and downs of the property tax freeze proposal
Feb. 4: Republican Gov. Bruce Rauner proposes a two-year property tax freeze, saying local governments have to cut expenses.
May: Rauner publicly drops the two-year limit, saying voters should have to approve before property taxes could “ever be raised.”
June 8: Marengo Democratic Rep. Jack Franks' property tax freeze bill fails in the House. Rauner opposes it, saying a freeze has to come with other reforms.
June 22: Democrats again put a property tax freeze bill up for vote, saying it's identical to Rauner's proposal. It fails again. Republicans, mostly voting “present,” accuse Democrats of political games.
June 25: Rauner goes back to the two-year property tax freeze, calling it a compromise proposal.