Education

Rauner's pension shift proposal 'financially devastating' to QPS

Joy Sanner and her teacher Debbie Million joke about going outside in the cold at Madison School on Friday, Feb. 16, 2018. Quincy Public Schools Superintendent Roy Webb says a proposal by Gov. Bruce Rauner to shift pension costs to local schools would be “financially devastating” to the district. | H-W Photo/Jake Shane
By Herald-Whig
Posted: Feb. 17, 2018 4:00 pm

QUINCY -- Quincy Public Schools Superintendent Roy Webb says a proposal by Gov. Bruce Rauner to shift pension costs to local schools would be "financially devastating" to the district.

"It's not in our budget at all. It's not projected to be in our budget at all," Webb said. "It would be very tough for Quincy Public Schools to try to take that on."

The Republican governor proposed a $694 million savings to the state's bank account by shifting the employer portion of teachers' pension contributions to local districts over four years. Generally, employees pay 9 percent of their salaries, and this year, the state is paying 10 percent of what's owed for the year.

The amount paid by the state varies each year based on the number of TRS employees in each district. "Last fiscal year the amount the state paid on behalf of QPS for TRS pensions was $9,014,272," Chief of Business Operations Ryan Whicker said.

Schools argue that picking up the tab would have devastating effects and worsen inequity, which last year's funding change aimed to end.

"That was one step forward. This would be 10 steps back," Webb said.

QPS expects $400,000 in new money -- although final figures still are not available -- from the $350 million earmarked statewide for the evidence-based funding model, which gives needier districts extra money for educational services.

"The cost of the pension shift would be significantly more than that increase," Webb said. "That state of Illinois has a problem with pensions. They need to address that problem and solve it, not just hand it off to the local communities."

The plan is part of a $1.3 billion spending cut Rauner suggested, supplemented by $470 million in savings from dictating state health insurance terms, instead of allowing employee unions to negotiate them. Neither plan has much support in a Democrat-controlled General Assembly, and school leaders statewide argue that the shift would lead to tax increases and cuts.

"This would be virtually impossible for the district to absorb without some sort of additional funding stream," Whicker said.

Rauners' justification for the shift is that if pension costs were paid by local governments, they'd have incentive to reduce the burden.

But Webb said it's unfair to expect local school boards to pick up the cost of something that was put into the School Code by legislators and state government.

The state's Teachers' Retirement System gives retirees with full benefits 75 percent of their salary and guaranteed 3 percent increases after that – "all things that make it a great pension system but an expensive pension system," Webb said.

Phasing in the shift over four years would be especially devastating to school districts' bottom lines.

"Past plans had it phased in over 12 years, 15 years, which still would be tough to swallow," Webb said. "They need to address that problem and solve it, not just hand it off to the local communities."

Webb plans to reach out to state Rep. Randy Frese and state Sen. Jil Tracy with his concerns about the proposal and work with the Illinois Association of School Administrators and the Illinois School Board Association.

Beyond that, he'd like to see the governor, legislators, the associations and the unions work together to address the pension issue.

"It's one of the benefits that teachers and school officials work for, but it's not sustainable," Webb said. "Something has to be done."

Some information for this story was provided by the Associated Press.