Senator Manar Puts Lipstick on a Pig

In today’s Crain’s Chicago Business, Senator Andy Manar wrote an article about Senate Bill 1, a bill creating a new formula for funding education based upon what is called the “evidence-based model”. Simply stated EBM is a 27-step formula that measures a school district’s “adequacy” toward providing sufficient funding.

The article contains some inaccuracies which cannot go unaddressed and attempts to put a soft light upon what is the hard truth about this bill: that it’s a multimillion-dollar bailout of the Chicago Public School system.

Senator Manar starts out by stating:

“Illinois has the most regressive education funding system in the nation because of its reliance on property taxes and the state’s inability to meet its annual funding commitment. The result: Wealthy districts invest upward of $30,000 per student; poor districts as little as $6,000 per student.”

On this point I agree with him, but for a different reason. Our funding formula used to be quite progressive, but in 2004, the definition of “poverty” was changed to sweep more people up into its definition, resulting in an increase in the state’s expenditure for Poverty Grants from 10% of the General State Aid (GSA) formula in FY 2000 to more than a third in FY 2012, a 431% increase. I’m not saying that districts with higher concentrations of poverty don’t have unique problems that need additional resources, what I am saying is that you don’t have the right to take a basically progressive formula, change it and then cry foul over it being regressive.

In addition, the PTELL subsidy has grown from just $ 46 million in 2000 to $ 780 million in 2009, an increase of 1,267%. PTELL adjustments have particularly benefited Chicago Public Schools, which enrolls 18% of students, but receives 49% of PTELL dollars. As a result of these programs, Chicago has seen its education property tax rate drop from $3.60 per $100 of equalized assessed valuation (EAV) in 2001 to $2.37 in 2009. The $2.37 tax rate for Chicago compares with rates of $3 to $6 per $100 of EAV in school districts elsewhere in Illinois.

Neither the poverty grant nor the PTELL subsidy is “new money”. This is money that has been taken from what was a relatively progressive general state aid formula, making it much more regressive. As more state money goes into the CPS, local districts are left with nothing but property taxes to pay the bill.

The article then goes on to say that the formula:

“(A)lso eliminates the Chicago block grant, which gives CPS a prioritized, guaranteed level of funding from certain grant programs regardless of need. No more special deals.

No it doesn’t. The bill adds the $250 million of the Chicago block grant into the Base Funding Minimum (BFM) for CPS going forward. Under current law, this is money given to CPS that is over and above the actual claims of the District. None of the other 851 school districts get more than their actual claims. This provision in any form is a $250 million subsidy going directly to CPS at the expense of all other school districts in Illinois into perpetuity, and it is wrong. Continue reading

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Don’t Stick the Locals With Springfield’s Problems

In my last episode of “Riding Shotgun With Steve”, I said I’d be in favor of getting rid of PTELL for education. Before the torches and pitchforks show up on my front lawn, I want to explain the reasons why. The following is from a post I published back in September of 2015:

“The Property Tax Extension Limitation Law (PTELL) is designed to limit the increases in property tax extensions (total taxes billed) for non-home rule taxing districts. Although the law is commonly called “tax caps,” the PTELL does not cap either individual property tax bills or individual property tax assessments, it only slows the growth of revenues to taxing districts when property values and assessments are increasing faster than the rate of inflation.

As a result, property owners have some protection from tax bills that increase only because the market value of their property is rising rapidly. Increases in property tax extensions are limited to the lesser of 5% or the increase in the national Consumer Price Index (CPI) for the year preceding the levy year. The limitation can be increased for a taxing body with voter approval.”

The problem is that while PTELL makes sense for local taxing districts such as municipalities and the like, much of what you’re required to pay for education is determined in Springfield (mandates, pensions, etc.). Therefore, if Springfield is telling local taxpayers that they have to pay for all this extra stuff, local taxpayers shouldn’t be hamstrung as to how they pay for it. That’s not to say that the State doesn’t need to stand up and pay it’s share. Here’s my latest “Riding Shotgun With Steve” which discusses this matter:

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Let’s Not Throw Out the Baby with the Bath Water, at Least Not Yet

With the session drawing to a close, the two big items looming over us are the budget and finding a new formula for funding education. While the Governor and Speaker continue to circle each other like turkeys circling a dead cat over the budget, we’ve been working on a plan to change the way education is funded in Illinois.

As I’ve mentioned before, I’m a member of the K-12 Appropriations Committee, the K-12 Curriculum and Policies Committee and the House Commission established to examine the “evidence based model” embodied in H.B. 2808. H.B. 2808 was voted out of committee this week, and will move on to second reading on the House floor.

I voted “no” in committee because the bill is not complete, and because I’m not convinced that we can’t accomplish the same result by making changes to the current formula. The evidence based model has much to commend it, but simplicity is not one of them.

In 2015 I published a series of posts (here, here, here, here and here) which explained the shortcomings in the current funding formula. Now that I’m in the legislature, I now have the opportunity to have an impact on fixing it.

In my latest episode of “Riding Shotgun with Steve”, I discuss the current funding formula and talk about making some changes that I believe may accomplish the goal of providing adequate state funding without throwing out the formula altogether.

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Frustrated? Call (217) 782-5350. Ask for Mike.

We have 19 days until the end of the legislative session, and how have we spent the month of May so far? We didn’t meet at all during the first week, and this past week was spent passing resolutions and making “points of personal privilege”. We didn’t vote on one bill, and didn’t go anywhere near talking about getting a budget. We were supposed to be in Springfield all week, but Friday session was cancelled.

I’m going to lay this directly at the feet of the Speaker. He controls what goes on in the House, and I think he decided to show everyone, including his own caucus, that he can jam up the works any time he wants. Here’s my latest episode of “Riding Shotgun with Steve”, where I expand upon that thought:

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Riding Shotgun With Steve

It’s a 3-1/2 hour drive back and forth from Woodstock to Springfield, so I landed on the bright idea of recording my thoughts on my time in the General Assembly on video.*

I’m calling the videos “Riding Shotgun With Steve”, and I’ll do my best to describe the process in Springfield and give you an idea of what’s transpired and why. I hope you like them. Here’s the first:

*Actually, I didn’t come up with the idea myself. I stole it from Mark Tupper of the Decatur Herald-Review, who does videos about Illini sports called “Riding Shotgun With Mark.”

Posted in Cost of Government, Illinois Budget | 1 Comment

A $10 Million Boondoggle You’re Going to Pay For

Last week, the Democrats in the House rammed through a piece of legislation (HB 2622) in which the state will loan $10 million to a new “public” workers’ comp insurance company to compete with the over 300 companies now licensed to sell such insurance in Illinois.

According the sponsors, we’re going to mimic such companies now operating in a number of other states. The bill does not address the causation standards in Illinois, which result in employers paying, on average, $2.23 per $100 in payroll in workers’ comp premiums. They think that by taking the “profit” out of workers’ comp insurance, they can drive down premiums.

I pointed out to the sponsor in the Labor Committee hearings on this bill that anyone who’s watched Shark Tank on TV would know that the first thing a potential investor would want to see would be the business plan explaining in detail how the investor was going to get his or her money back. If the taxpayers of Illinois are going to put $10 million (which we don’t have) into this venture with a promise to be repaid in 5 years, with interest, then the least she could do is tell us how that’s going to happen. We were told that the business plan would be forthcoming after the company was set up. In other words, we’d have to pass the bill to see what was in the bill. Sound familiar?

The Laborers’ union testified on behalf of the bill. I pointed out that if this was such a good, money-making idea, why didn’t he go back to his union and suggest that they fund this company with $10 million from their pension fund instead of putting the taxpayers on the hook. No response.

My seatmate Chad Hays made the comment that if he were to die and come back again as a State representative, he’d want to do so as a Democrat. He says it’s much easier, because the math never has to work on any bill you’re trying to pass.

I challenged the sponsor during debate on the House floor, and got nothing but palaver in return. Of course the bill passed in spite of that. You can see part of my comments by clicking here.

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If Hypocrisy Was Helium, We’d All Be Talking With Funny Voices

alternative-factsLast Wednesday, this sign graced a number of desks on the Democrat side of the aisle and greeted Governor Rauner as he entered the Speaker’s well of the Illinois House to give his annual budget address. During the speech there were fits of hooting and laughter from the same quarter, and not for the first time I came face to face with the reality of the unseriousness of this place.

The press made a lot of noise accusing the Governor of once again failing to propose a balanced budget as required by the Illinois Constitution. But there’s one thing they never mention: the Constitution says that the General Assembly is supposed to provide the estimate of revenues for the fiscal year from which the Governor proposes his budget. Article VIII, Section 2 of the Illinois Constitution provides:

(a) The Governor shall prepare and submit to the General Assembly, at a time prescribed by law, a State budget for the ensuing fiscal year. The budget shall set forth the estimated balance of funds available for appropriation at the beginning of the fiscal year…

(b)  The General Assembly by law shall make appropriations for all expenditures of public funds by the State. Appropriations for a fiscal year shall not exceed funds estimated by the General Assembly to be available during that year.

This inartfully drafted provision basically says 3 things have to happen:

  1. The General Assembly is responsible for estimating revenues for the year;
  2. The Governor must submit a budget based upon that estimate of revenue;
  3. The General Assembly shall appropriate those funds.

The process is supposed to start with the General Assembly’s estimate of revenues. Since Bruce Rauner became governor, there has not been a single instance of an estimate of revenue being prepared before the budget address. While the governor’s Office of Management and Budget has made the estimates for the past 3 years, it doesn’t alter the fact that it’s doing what the Constitution says is the General Assembly’s job. And why is that important? It’s important because it gives the General Assembly the colorable pretext of unaccountability, making people think that we in the legislature are mere rubber stamps to what the Governor says.

The time for proposing the budget is prescribed by law:

The Governor shall, as soon as possible and not later than the… third Wednesday in February of each year… except as otherwise provided in this Section, submit a State budget…

Further down the page it says:

By March 15 of each year, the Commission on Government Forecasting and Accountability shall prepare revenue and fund transfer estimates in accordance with the requirements of this Section and report those estimates to the General Assembly and the Governor.

So the Governor is supposed to submit a budget using numbers he isn’t scheduled to receive until a month later. It’s not that it makes a damned bit of difference to the fact that we’re in the shape we’re in, but it just underscores the ass-backwards way everything down here seems to run. The next time somebody points the finger of blame at the failure to provide a balanced budget, save a more than a little of the blame for the General Assembly. The process starts with us.

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