Rich Miller: Pritzker stands firm: State doesn’t owe Chicago schools $1.1B

An oft-repeated $1.1 billion demand from Chicago’s mayor would actually wind up costing state taxpayers $5.5 billion. And Gov. JB Pritzker is turning a big thumbs down.

Chicago Public Schools made the huge mistake of putting a ton of temporary federal pandemic aid into its permanent spending base for years and that money is just about gone. It also recently over-estimated some state tax revenues. Mayor Brandon Johnson also dumped $170 million in pension costs onto the district from his own budget, and the Chicago Teachers Union is asking for the moon in its contract negotiations. The end result is deficits as far as the eye can see.

Johnson has suggested CPS borrow money in the interim, but he has said over and over again that the state “owes” CPS $1.1 billion and he wants the state to pony up.

But does the state really owe CPS that much money? “No” is the simple answer.

First, a quick primer. The state’s Evidence-Based Funding law was passed in 2017 after years of work. The idea of EBF was to move to a system based on “adequate” state and local funding levels. A lot of factors determine adequacy, like regional salaries, how much districts spend, how much they have the capacity to spend, the types of district students (with an emphasis on low-income, English learners, special education), and more.

The legislation was designed to help districts eventually reach 90% of adequate funding. This fiscal year, the state will spend $8.6 billion on evidence-based funding. Negotiators realized from the beginning that the state didn’t have enough money to fund every school at 90% adequacy right away, so it’s been spending $350 million more each year (except fiscal 2021) in order to reach the eventual target where all districts have 90% adequacy. $50 million of that goes to property tax relief grants.

According to the Illinois State Board of Education, if the state had decided last fiscal year to just all of a sudden abandon the funding “ramp” and immediately reach 90% adequacy, the total state cost would’ve been $2.5 billion.

Of that $2.5 billion, the ISBE says, Chicago would’ve received $503 million, less than half the $1.1 billion that Mayor Johnson claims the state owes.

So, where does the $1.1 billion number come from? According to the state board, that amount would’ve been owed to Chicago last fiscal year if the state immediately funded schools at 100% of their adequacy levels. However, the board points out that 100% funding is not in state law, despite what the mayor is saying.

Johnson has always said that all Illinois schools should get what’s coming to them right away, not just Chicago. But EBF funding for all public schools at 100% last fiscal year would’ve cost taxpayers a whopping $4.85 billion, according to the State Board of Education.

But wait, there’s more. Mayor Johnson’s spokesperson released a statement to me saying in part: “[T]he state of Illinois provides all other school districts with nearly $3,000 more per student by fully paying their teacher pensions,” and went on to say they would work with the state to make that happen.

That’s about $969 million. Take out what the state already gives CPS for teacher pensions and you wind up with a tab of $615 million.

Add now you’re at $5.47 billion.

The mayor hasn’t mentioned that state law gives Chicago a special pension carveout. The Chicago school district’s ability to pay (known as the “local capacity target”) portion of the formula is reduced by whatever CPS spends on teacher pensions. This reduces the city’s amount that it has to pay for its own schools. Last fiscal year, CPS was given an almost $700 million reduction in its local capacity target.

Gov. Pritzker told me this past Friday that, despite all the public rhetoric, Mayor Johnson has never once personally asked him to help fund that $1.1 billion.

I told Pritzker that I assumed other school districts also put temporary federal money into their permanent spending bases and would also be demanding more state aid. “I don’t think that that’s the job of Springfield, to rescue the school districts that might have been irresponsible with the one-time money they received.”

“Poor fiscal management on the part of a local government is not necessarily the responsibility of Springfield,” he added.

Is CPS poorly fiscally managed? Pritzker at first hedged, then, when pressed, said he’d like to answer the question his own way.

“One-time money shouldn’t be spent for ongoing operations.”

• Rich Miller also publishes Capitol Fax, a daily political newsletter, and CapitolFax.com.