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Rauner Vetoes $215M Pension Payment For Cash-Strapped CPS

The Illinois Senate moved Thursday to override Gov. Bruce Rauner’s veto of a $215 million pension payment for the cash-strapped Chicago Public Schools.

The chances of the House overriding the veto -- action Rauner took earlier Thursday -- are less clear.  

The governor’s move means CPS now faces a $215 million budget hole for the current school year, setting up the latest round of potential budget cuts for the beleaguered school district. Facing a similar financial crisis last school year, CPS was forced to make mid-year budget cuts.

“Gov. Rauner today acted impulsively and recklessly and he reneged on a fundamental promise he made this summer to our school children, our teachers and these children’s parents,” CPS CEO Forrest Claypool said at an afternoon news conference.

“Our children in Chicago should not pay the price,” he added.

Claypool plans to work with House Speaker Michael Madigan and other state lawmakers to secure a House override.

In his veto message, Rauner said the pension funding for CPS was only to be released if legislators reformed state pensions by the end of 2016.

Senate President John Cullerton disputes that claim, saying the CPS bill was never tied to a state pension fix.

A statement from Rauner’s office said the governor is not interested in giving more money to CPS unless it is accompanied by major structural change.

"The taxpayers of Illinois want a balanced budget," the statement said. "That can only be done if we address the structural imbalances that have bankrupted the State and CPS alike and drain resources that should be spent on other priorities, like improving schools and funding social services. The taxpayers of Illinois do not want just another bailout. Let’s get back to work to end the budget impasse and put Illinois on the right track once and for all."

Cullerton said in a statement that he was "shocked and disappointed" by Rauner's veto. Cullerton said steps were being taken to reform state pensions and the governor could have waited another month before reaching the deadline for issuing a veto.

“By acting in such haste, the governor has unfortunately set back negotiations that I believed were advancing," Cullerton said in a statement. "Even worse, he has potentially forced the layoff of thousands of Chicago teachers and district employees.I don’t understand and am thoroughly disappointed in his short-sighted move.

In an interview with WBEZ, Mayor Rahm Emanuel blasted Rauner for “lashing out.” Emanuel said he was surprised the governor vetoed the bill because conversations between the legislative leaders on statewide pension reform were ongoing.

“The governor...never gave anybody a heads up about the veto because he just reacted and lashed out out of frustration on other items,” Emanuel said. “He’s lashing out and that’s not the way to create steady, firm leadership.”

Emanuel, speaking over the phone from Mexico City where he is attending a climate change summit, said he has been in touch with people in Springfield during the veto session.

The mayor said he is also keeping his eye on a bill that would reform two city workers pension funds. Chicago aldermen already approved an increase in a 911 surcharge and higher water and sewer taxes to help shore up the struggling funds.

But state lawmakers need to approve changes that would increase new employees’ contributions. The measure sailed through the House in a 91 to 16 vote, but the Senate has yet to take up the measure.

In a statement, Rauner spokeswoman Catherine Kelly said the governor “cannot support this bill without real pension reform that protects taxpayers.”

Kelly said the bill “essentially authorizes another property tax hike on the people of Chicago and sets a funding cliff five years out without any assurances that the city can meet its obligations.”

Emanuel disputed this claim, responding with a phrase he often turns to: "You're allowed to have an opinion, you're just not allowed to have your own facts"

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