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Schools worry about covering pension costs

Administrators warn of higher property taxes

SPRINGFIELD (AP) – Public school administrators told lawmakers Thursday that some local districts would have to raise property taxes if legislators vote to have them cover the cost of teacher pensions.

House Speaker Michael Madigan has said suburban and downstate districts get a “free lunch” because the state pays their teacher pension costs. The Chicago Democrat called for a special hearing to receive input from school districts’ leaders, as well as university and community college representatives.

“On the merits, the state of Illinois should not be paying for the pension costs of employees of local governments or other governments,” Madigan said following the hearing. “We just want to provide that the people that are spending the money pay the bill not somebody else.”

Yet, public school administrators testifying at the hearing said local districts would have to raise property taxes in order to pay for the added financial burden, which they said would follow a fourth year in a row of cuts to education funding by the General Assembly.

“I think one of the biggest concerns we have with this issue is where the money would come from ... to pick up any costs,” said Ben Schwarm, deputy executive director of the Illinois Association of School Boards.

The administrators said potential tax increases would depend on the district’s wealth and the cost that the state ultimately chooses to shift to the districts.

Public university representatives also testified Thursday. They said the change could result in a 2 percent tuition increase.

Madigan said the state is in “grave financial difficulty” and the districts must be part of the solution.

The idea of shifting some downstate teacher pension costs from the state to local school boards has been a contentious argument during the Legislature’s yearslong discussions to fix Illinois’ $97 billion pension emergency.

The concept had been part of various comprehensive reform proposals, all of which failed in the Legislature, in part because Republicans and some Democrats feared it would drive up local property taxes.

Madigan left it out of a plan he proposed, and the House approved it last week. He then announced he would be holding hearings to finalize a plan to begin the cost shift. He has vowed to pass legislation on the issue by the General Assembly’s scheduled May 31 adjournment.

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