Madigan: Downstate, suburbs, need to pay up
By ABDON M. PALLASCH Political Reporter apallasch@suntimes.com June 24, 2012 7:12PM
Illinois Speaker of the House Michael Madigan, D-Chicago, speaks to lawmakers from the speaker's podium in the House during session at the Illinois State Capitol Thursday, May 31, 2012 in Springfield Ill. (AP Photo/Seth Perlman)
Updated: July 26, 2012 6:14AM
Most Chicago property taxpayers pay $164 a year more than their suburban and downstate counterparts under the state’s uneven teacher pension funding system, according to numbers the Chicago Public Schools provided to the Sun-Times.
House Speaker Michael Madigan said last week he would not proceed with the package of reforms to solve the state’s $84 billion unfunded pension liability until the inequity hanging over Chicago taxpayers is fixed.
“Let’s eliminate the free lunch for school districts outside of Chicago,” Madigan said.
Over the years, the state voluntarily picked up responsibility for funding the pensions of suburban and downstate school districts.
That means that every year through state income taxes, sales taxes and other fees paid to the state, the average Illinois resident — including Chicago residents — pays $110 a year to fund the pensions of suburban and downstate teachers, according to estimates Gov. Quinn’s budget office provided to the Sun-Times.
Those suburban and downstate school districts can vote to increase their teachers pensions, then hand the bill over to the state because those districts do not pay the costs — state taxpayers do, Madigan noted.
“They’re making spending decisions, but they’re not paying the bill,” Madigan said.
In Chicago, the Chicago Public Schools funds its teacher pensions without help from the state based on money it collects from taxes on Chicago property owners.
That means the average property owner in Chicago pays $164 a year, according to estimates by the Chicago Public Schools.
That means Chicago residents pay twice — once to the state for suburban and downstate teachers and once to the city for Chicago teachers.
Suburban and downstate residents pay only once.
As Madigan and State Senate President John Cullerton have sought to fix that inequity, they have run into opposition from suburban and downstate legislators who fear that forcing suburban school districts to start paying their share would force them to raise property taxes on downstate and suburban residents.
Madigan, Cullerton and Quinn have responded with proposals to phase the cost shift in over 10-12 years. They argue many of the school districts have more than enough in reserves that they would not have to raise property taxes.
Republican Senate Leader Chris Radogno and House Leader Tom Cross came back with a counter-proposal Thursday when they met with Quinn and the Democratic leaders: They will not support the cost-shift until a comprehensive study is done of all school funding in the state.
There are “pots of money” available to the Chicago schools not available to suburban and downstate schools, Radogno said. She referred to money for poor students, of which there are higher concentrations in Chicago.
Quinn said he would have the study done in five weeks, so any action on the comprehensive pension reform is delayed for at least another five weeks.
