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Lawmakers Hash Out A Deal But Effects Of Impasse Remain

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After almost a full year without a state budget, Illinois lawmakers finally closed a stopgap deal on Thursday. 

Most recently, the Springfield budget fight focused on the funding of public schools. But that was just one of the sticking points that dragged this deal out for so long. 

Here’s a breakdown of the big compromises, how long they’ll last and what we can expect after they run out.

The underfunded retirement systems of state employees

The Fight: How should the state make up for the gap in funding for pensions for state workers?

The Compromise: Part of the agreement approved Thursday puts conditions on a plan that would send more than $200 million of state money toward the underfunded pensions for Chicago Public School teachers. But a procedural hold has been placed on that money, and the Chicago Teachers Pension Fund will not receive the state support if lawmakers don’t also agree on a measure to address the state’s own underfunded retirement systems for Illinois employees. A previous attempt to reduce employees’ retirement benefits - over labor union’s strong objections - was struck down by the Illinois Supreme Court.

What’s Next: Gov. Bruce Rauner has said he would support a change in state employees’ pensions that would offer state workers, lawmakers, and suburban and downstate teachers a choice in the structure of their retirement benefits. This choice is seen as a way of reducing the cost of the pensions, but the issue of whether it’s constitutional is still up for debate. Meantime, labor unions have rallied in support of Democratic leaders since Rauner took office in 2015, and the earlier attempt to reduce the retirement benefits of union members struck a bitter chord with labor. It’s not yet clear what form any attempt to address the pensions of state employees will be before the deadline that’s been set for the Chicago Teachers Pension Fund to receive its $200 million. On June 30, Chicago Public Schools made a deposit of $657 million to its pension fund.

Funding for public schools

The Fight: How much should school districts with residents who have low property values (and therefore low property tax revenue) rely on state funding? 

The Compromise: There is no compromise on this issue yet. Instead, despite years of debate over the issue of a state school funding system that many argue is inequitable, the stopgap budget agreement, approved June 30, forwards a set amount of money toward school districts that can’t rely on money from property taxes to fund its schools. 

What’s Next: The Illinois State Senate has passed various changes to the funding formula with mostly Democratic support, but those measures have not advanced in the House of Representatives. Over the past year, House members heard testimony from various school districts about what a change in the school funding formula would mean to their students and staff, but no compromise has been reached. Meantime, this issue has been at the core of Gov. Rauner’s warnings against a state “bailout” of Chicago Public Schools. 

What’s next for the state budget

The Fight: Does the stopgap budget mean state services that weren’t paid in the past year are in the clear? 

The Compromise: Organizations that contract with the state are not in the clear financially. While the stopgap budget addresses portions of services that didn’t get paid for the 12 months Illinois had no budget, it doesn’t make those organizations whole. Instead, it’s likely a court battle will continue to prompt the state to make payments. 

What’s Next: A lawsuit filed by social service agencies against the state in an attempt to force the government to pay for services already performed is expected to continue in Cook County court. “It’s about 12 months of money to spread over 18 months of time,” Andrea Durbin, with the Illinois Collaboration on Youth, said of the stopgap budget. She expects the number of organizations suing the state for payment to increase. “There’s a lot of questions, I guess, in terms of when people will actually see money transferred to their organizations,” Durbin said.

Tony Arnold covers Illinois politics for WBEZ. Follow him @tonyjarnold.

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