GOV EYES CPS PEN­SION CUT

Sell­ing Thompson Cen­ter also part of Rauner’s bud­get plan

Chicago Sun-Times - - POLITICS - BY TINA SFONDELES Po­lit­i­cal Re­porter

SPRING­FIELD — Using funds from an in­come tax hike he ve­toed, Gov. Bruce Rauner on Wed­nes­day said he’d help bal­ance the bud­get through a change in health in­sur­ance ben­e­fits for re­tired teach­ers and state em­ploy­ees — and a cut to Chicago Pub­lic Schools teacher pen­sions.

“The sim­ple truth is this: We have to change the way we man­age pen­sion costs and group health ex­penses,” Rauner said. “If we don’t, our fi­nances will con­tinue to de­te­ri­o­rate, our econ­omy will re­main slug­gish and our tax bur­dens will stay high and keep ris­ing.”

In his fourth bud­get pro­posal — just weeks be­fore a pri­mary elec­tion — Rauner is seek­ing to cut $ 228 mil­lion for Chicago teacher pen­sions and $ 101 mil­lion from univer­sity pen­sions.

He’s also propos­ing the re­moval of group health in­sur­ance for state em­ploy­ees from col­lec­tive bar­gain­ing — a move that will re­quire leg­isla­tive sup­port that may prove dif­fi­cult to get. That would save an es­ti­mated $ 470 mil­lion, Rauner ar­gued, while adding the state would have an ex­tra $ 351 mil­lion in sur­plus to help pay down debts within his plan.

The changes to teacher and state pen­sions may get caught up in a court chal­lenge. But the ad­min­is­tra­tion con­tends it would win that chal­lenge.

The gover­nor’s bud­get pro­posal once again re­lies on sell­ing the James R. Thompson Cen­ter, which will also re­quire leg­isla­tive ap­proval and be­came a stick­ing point last year be­tween Rauner and Mayor Rahm Emanuel. The ad­min­is­tra­tion said the es­ti­mated $ 300 mil­lion would be counted in sav­ings in next year’s bud­get.

Rauner said he “was right” in his veto of a bud­get pack­age that in­cluded the in­come tax rate now in place, even though about $ 5 bil­lion of his spend­ing would come from in­come taxes.

“We see the bud­get as an op­por­tu­nity to set pri­or­i­ties with­out spend­ing be­yond our means,” Rauner said.

To help roll back an in­come tax hike leg­is­la­tors ap­proved in their bud­get plan this year, over­rid­ing his veto, Rauner said “true pen­sion re­form” is needed.

“The peo­ple of Illi­nois are taxed out. A $ 1 bil­lion in­come tax cut should be our No. 1 ob­jec­tive at the end of this ses­sion,” Rauner said to some ap­plause.

The gover­nor’s bud­get in­cludes shift­ing some sub­ur­ban and Down­state school’s “nor­mal” pen­sion costs away from the state and to lo­cal dis­tricts. That would equate to a cut in pay­ing for pen­sion costs for Chicago Pub­lic Schools.

Un­der a school fund­ing deal reached last year, CPS re­ceived $ 221 mil­lion more for its teacher pen­sions. The talk of shift­ing pen­sions had CPS of­fi­cials on edge — as the new fund­ing for­mula hasn’t even been en­acted.

“Our state made his­toric progress just six months ago, and we can­not go back­wards,” CPS CEO Jan­ice Jack­son said in a state­ment.

The pro­posed Rauner bud­get in­cludes a $ 37.6 bil­lion spend­ing plan — with $ 1.3 bil­lion in sav­ings com­ing from shift­ing pen­sion costs onto schools. The bud­get calls for in­creas­ing ed­u­ca­tion fund­ing by about $ 550 mil­lion.

As­sis­tant Ma­jor­ity Leader State Rep. Greg Har­ris, D- Chicago, said Democrats plan “to care­fully re­view” the bud­get to en­sure it’s bal­anced.

Illi­nois Se­nate Pres­i­dent John Culler­ton called the bud­get pro­posal “in­ten­tion­ally de­cep­tive” and one that un­der­mined Rauner’s own ac­com­plish­ments.

“I met with the gover­nor this morn­ing. He said he wants to roll back taxes and put more money in ed­u­ca­tion. Here’s the prob­lem. His bud­get does the op­po­site. He spends the en­tire tax in­crease. And he cuts money for ed­u­ca­tion,” Culler­ton said in a state­ment.

Repub­li­cans sang a dif­fer­ent tune.

Illi­nois House Repub­li­can Leader Jim Durkin called the plan “a fair, rea­son­able and bal­anced bud­get.”

And Illi­nois Se­nate Repub­li­can Leader Bill Brady, R- Bloomington, too called it a “bal­anced bud­get.”

| RICH SAAL/ THE STATE JOUR­NAL- REG­IS­TER VIA AP

Gov. Bruce Rauner ap­proaches the speaker’s dais in the House Cham­ber to de­liver his bud­get ad­dress Wed­nes­day at the Capi­tol.

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