Dist. 205 Board: Illinois Districts Soon Could Face 'Catastrophic' Financial Burden

Rumblings in Springfield have District 205 officials "very concerned."

Is it possible the state of Illinois will soon shift the burden of funding teacher pensions to local school districts?

Elmhurst Unit District 205 Board members and some state lawmakers say it's not only possible, but likely.

At Tuesday's School Board workshop meeting, board member Maria Hirsch mentioned House Speaker Michael Madigan's January visit to Elmhurst College and his comment that local school district's should pick up the cost of funding teacher pensions.

"My chin dropped," she said. "I said to the person next to me, 'Did I hear that right?' "

She said she has since learned other leaders in Springfield have made similar comments.

"I'm going to guess that there is serious consideration of the state passing along the cost of pensions to local districts," she said. "We need to pay close attention to this. This will dramatically change the fiscal outlook for school districts all over the state of Illinois."

The Daily Herald reported Thursday that 24th Senate District candidate Kirk Dillard believes this is a very real possibility, and a "bad idea." He said teacher contract negotiations at the local level are part of the problem, but punishing the taxpayer is not the answer.

His opponent, Chris Nybo, told the Herald he opposes shifting the entire burden to local districts, but agreed local school districts are negotiating "too lenient" pensions.

Gov. Pat Quinn's office is looking seriously at the issue, and Senate President John Cullerton also has suggested local school districts should pick up the costs of teacher pensions, Hirsch said.

"The state has been funding teacher pensions—or not funding teacher pensions—and having access to those resources when they need to borrow funds," she said. "They also at the state level set every rule for the teachers retirement system in terms of what their years of service are, what type of benefits they're going to receive."

Board member Chris Blum said that in fiscal year 2010, Illinois income tax payers contributed $11.8 million to the District 205 pension fund, which represents 23.3 percent.

"$12 million, and they're looking to shift that to us," he said. "And the fund is only 48 percent funded. The magnitude is very significant."

Board member Jim Collins said the effect would be "catastrophic."

"Clearly, this is an effort by the state to take (the burden) from the Illinois income tax payer and dump it into the lap of the Illinois property tax payer and then make every school district deal with that," he said. "This will have catastrophic implications for every school district in Illinois."

Property tax payers currently pay about 90 percent of District 205 revenues, with 6.7 percent coming from the state. In order for property tax payers to provide additional funding for teacher pensions, the Illinois Tax Cap would have to be lifted, legislators have said. The tax cap limits property tax increases to the Consumer Price Index of the previous year or 5 percent, whichever is lower. The CPI has never been at 5 percent since the Tax Cap was initiated in 1991. The CPI upon which local taxing bodies have based their most recent levies is 1.5 percent.

In the Herald article, Dillard said property tax bills could increase by as much as 14 percent if local districts are required to fund teacher pensions.

"This is something that has the potential to dramatically alter our financial situation," Hirsch said. "We have not taken a very proactive role in reaching out to our state legislators. This is an appropriate situation and time for us to (do so)."

But it's not likely there would be much discussion among interested parties before such a mandate, she said.

"Given the track record of Illinois, I don't think there's going to be a long, collaborative process. It's going to be something that will be sprung on us," she said. "But it needs to be stated publicly that we're very concerned."

Karen Chadra (Editor) February 16, 2012 at 06:08 PM
For some reason, I was unable to add a hyperlink to the article referenced in the story. Here it is: http://www.dailyherald.com/article/20120216/news/702169979/
Dan February 17, 2012 at 01:32 AM
The odd thing is that Dillard claims they could just override the property tax caps. It really is time for us to start paying attention to what are elected officials are doing and get active in the process. Its is interesting that it is against the state constitution to change pensions but apparently not to lift the property tax cap. From district 205 fast facts average per student cost is $12,482 . Do the math and you see that with the state providing 6.7 percent that equal $836 per student per year or $2.29 cents per student per day in a calendar year. I think in political speak that is equal to a small cup of coffee and a donut that the state is willing to invest in a child's education.
Paul Guerino February 17, 2012 at 02:31 AM
WHAT IF? WHY NOT? These are two ways to start a discussion. What if both Springfield and D.C. stopped "giving" money to the schools and the local government collected the money to run our schools? Why can't we get rid of N.C.L.B. and the I. S. A. T.? They were created by lawyers and paper pushers. We should give control of the schools back to the local taxpayers. The I.S.A.T. is a joke. The state keeps on changing the rubric for the writhin part and then has the test graded out of state by high school graduates. When we send money away to a larger governing body we never get back as much as we send. The taxing body takes out the cost of collecting the tax and running the program.. The money we do get back has many strings attatched. Why not push for true local control? Like I said, What IF and WHY NOT.
Paul Guerino February 17, 2012 at 02:38 AM
Sorry, writing not writhin. I hope no one jumps on my typing error.
Dan February 17, 2012 at 03:16 AM
Paul, It would really help if it was possible to edit comments. I reread my comment and noticed I wrote are when it should have been our. It doesn't look like you can even delete your own comment and rewrite it like you could in the past.
Paul Guerino February 17, 2012 at 03:45 AM
Dan. The last time I ran for the B.O.E. I typed there in place of their and got crucified. I wish the taxpayers were as concerned about taxes as they are about sports. I wish they were as concerned about Lincoln School as they are about activity fees. I have heard parents complain about driver's ed. costs. How many of you remember when there was no driver's ed. The state mandated it, started to pay for it, now we are stuck with it, and people are complaining about the cost. In the past parents taught their children how to drive. The school didn't have cars or drivers ed teachers. Going back to pay to play is going to be an unfortunate reality in the near future. American public education is under attack from within and without. You should talk to a teacher about the problems EVERY school is facing. I visit schools where there is only one string in a sport. The kids who would like to play, but aren't top shelf, don't even get the chance to warm the bench. Unless an activity makes money--- it is gone. The attack on the schools has gained widespread support because the taxpayers can do something about local spending. They don't have much control over NASA spending, but they can stop the Park District, Library Board, City Government, or B.O.E. dead in their spending tracks. The Chinese have a saying,"May you live in interesting times." It is actually a curse. I think we are living in interesting times.
Ken February 17, 2012 at 04:42 PM
First of all, we must eliminate pensions for teachers. Why should they get (along with a more than generous salary) them when we, the providers, don't have them?
Lisa February 17, 2012 at 06:29 PM
Hi Ken, What is your profession and salary?
Ken February 17, 2012 at 07:03 PM
I'm working in manufacturing for a company ready to close shop in Illinois. I make $40000 a year. I've never had a pension, I just pay high taxes so others can eat at the trough. When I retire I'll have to live on my 401k and when that runs out I'll be SOL. WHAT'S THAT GOT TO DO WITH THIS STORY?
nana February 17, 2012 at 07:14 PM
I think there is a fundamental misunderstanding that is being repeated in the story above: the state does not FUND teacher pensions-they contribute a share, but the teachers pay almost 10 percent of their salaries to their pensions. The state contributes, or is supposed to contribute, 3%. Not only have they not been paying their share, they have been raiding the pension funds to balance the budget year after year. Now they owe their share with interest and they "cry poor". My understanding is that the state initially wanted to save money by not paying into social security for the state employees. We pay 6% of our salary to social security and the employer pays 6%. Teachers now pay 10% and the state pays only 3%. TEACHERS DON'T GET SOCIAL SECURITY. If the pension is done away with, they will have no retirement. How would you like it if you put 10% of your salary in the bank to save for your retirement and then when the time came to retire the bank said, oh sorry, we spent your money and we don't have the money to pay it back? That's what the state is saying. This is not an extra perk teachers get on top of social security-like anyone other than public employees who gets a pension on top of their social security. This IS their "social security".
nana February 17, 2012 at 10:03 PM
Hey Ken-you have a 401K and social security. Teachers get a pension. Period. They have the option of starting a 403B but in Elmhurst it isn't contributed to by the district. And I know that a lot of companies in the private sector have also stopped contributing. Teachers don't pay into social security because that would be considered double dipping. A teacher's pension is not a "perk". It's the only retirement they have. That's what it has to do with this story.
Paul Guerino February 18, 2012 at 05:50 AM
Nana, I have been saying this as long as this "pension Issue" has been a hot potato. The problem was created by the Legislature and their constant robbing of the teacher's pension fund. I am willing to bet dollars to donuts that the pensions for the judges, governors, and members of the legislature are fully funded. A teacher can get social security if they worked in the private sector, and paid into the fund, and collected the required number of quarters of credit. However, they can only collect 20% of what they deserve.The Fed's passed a law limiting teachers and others who worked for various governmental bodies from collecting their full social security payment. The last I heard this did not apply to them. If I am wrong about this I am sure I will be corrected. The use of the word entitlement is misleading. The pension was earned. The pension was fully funded by the teachers. It was looted by Springfield. Both the Democrat and Republican parties are guilty of this crime. A quote that comes to mind is, " A pox upon both of their houses." As I have said in the past when commenting about other articles. Bash the teachers unions as much as you wish. Just remember the two most powerful unions in our country are the ABA and the AMA.
Dan February 18, 2012 at 02:27 PM
Since teachers are already funding their own pensions that are being looted by Springfield why aren't teachers the loudest proponents for taking the pensions out of the politicians' hands instead into personal retirement accounts?
nana February 18, 2012 at 08:50 PM
Ill bet a lot of those teachers have been in TRS their whole career and don't have much if any social security. If they lose their pensions what are they supposed to do? I think pauperizing the elderly so wrong. I was so incensed when United Airlimes dumped their pensions-that was a promise made to those people. And Paul is so right-I am a Med Tech and our professional organization can't hope to match the power of the AMA. At any rate the teachers are pawns in a chess game in one of the most corrupt states in the union. They are scapegoats to take the heat off the politicians who got us all into this mess.
Zeebe February 18, 2012 at 10:58 PM
Another reason for term limits; our elected officials are resposible for this mess by spending monies that should have been going to the pension funds. Now it needs to be fixed. I have more confidence that relative newcomers to springfield, like Rep Nybo can find equitable means to fix this mess. Dillard obviously has done little in his 20+ yrs to alleviate a broken system, rather he bears responsibility.
Paul Guerino February 18, 2012 at 11:04 PM
Dan-- When I started teaching in 1964 the state was paying its fair share. The system was working. It is the elected officials with their desire to be popular that have created this mess. I know there is at least one lawyer in this town that feeds at the political trough in Chicago. Our BOE has as its general contractor a company that is currently being investigated. Look to our elected leaders as part of the problem not the teachers.
Ken February 19, 2012 at 12:15 PM
Give me a break! My Social Security will be about $1500 a month! I have 3 teacher friends who if they retired right now would get around $90,000 a year from their pensions plus medical! Also in Elmhurst I pay, through my real estate taxes, for the teachers' share of their contributions. I paid my fair share of this fiasco through taxes and I shouldn't be asked to pay extra dime to make up the loss. The teacher's union and its members have backed these pols with their votes and contributions over the years in exchange for these exorbitant pensions. I say you elected them, you got get the money from them.
Paul Guerino February 19, 2012 at 07:30 PM
Zeebe--Here is a fact of life, in both Springfield and Washington our elected officials have tenure. It is called senority.The longer you serve, the higher up you are in a committee and the more powerful the committee you serve on. Nybo's time in the house in Springfield means nothing in the senate. Elmhurst would take 20 years of Dillard's senate senority and throw it away. If you want change talk to Dillard. Vote with you money and feet. Support those that believe as you do. I have been harping for years on the Patch, "Shut up and run." Not a very nice thing to say, but it is the truth. Those few people that actively support groups and ideas get their way. People that just sit around and talk are ignored. If you think Nybo is that good, put up a sign, write a check, walk the neighborhood, and pass out literature for him.
Bunky February 19, 2012 at 08:02 PM
Sorry...s/b "kind" in last sentence.
Bunky February 19, 2012 at 08:05 PM
Get rid of tenure and have job security based on your performance. Why is being a teacher above the rest of the working class? I get reviewed like everyone else; outside of the teaching community. Years back our school district over inflated the teachers salaries 15% over a two year period for those teachers that were going to retire. So by the time they retired it gave them a higher salary and they collected 75% of their ending salary. After thiz happend the state of Illinois passed a law to make it illegal to give those ki.ds of raises.
Paul Guerino February 19, 2012 at 08:27 PM
Bunky--- For your information, that 15% was a common addition to administrators packages in Elmhurst and the entire state. Russ Theims fought giving it to teachers hand and fist,but gave it to himself and all the other administrators in Elmhurst. Look at business. Stop electing BOE members with law degrees and banking experience. They already control Springfield and Washington. Look what a great job they are doing there. We need a BOE like old Elmhurst District #3 had. The BOE members were self made businessmen from the trades, they had dirt under their fingernails. They new what work was and that the classroom is what was important not the board office.
Bunky February 19, 2012 at 11:06 PM
Paul~ I completely agree with you! I have not re~elected any existing BOE members in the elections. Wish we could vote out some administrators too!
D February 22, 2012 at 02:41 AM
you all left out the part that teacher pensions are not taxed. 5% bonus in illinois!
Ken February 22, 2012 at 03:19 PM
Yet another reason to do away with the pension system.
nana February 22, 2012 at 10:46 PM
So, Ken-regardless of how much teachers make in their pensions, it's still the only retirement they have. Maybe they will end up having to take less or work for longer, but you are ok with teachers having NO RETIREMENT at all? What do you suggest they do?
Ken February 23, 2012 at 03:16 PM
Obviously we're on the hook for the money that the unions and the pols extrapolated from the taxpayers. First, all new hires---teachers, government workers, pols, etc., will no longer be offered a pension, just like they did to the postal workers years ago. They get a 401k just like the rest of us. Secondly, those left with pensions will have to contribute more and expect less and start paying a greater share of medical premiums. The unions should take money they use to pay off politicians and put it into the pension funds. Lastly the state should start selling off assets to cover the amount they robbed from the funds---don't increase our taxes for this; we already payed our share.
Paul Guerino February 24, 2012 at 03:18 AM
Ken--- What would you sell?
Ken February 24, 2012 at 03:09 PM
All that land that was bought up for Jesse Jackson jr's useless pipe dream of an airport that no airline wants.
WLA February 15, 2013 at 09:59 PM
Why do we demonize teachers and others who recieve pensions? In my profession a public sector position comes with a pension and 25% less pay. I chose work in the private sector and make my money upfront. Since that was my choice I can hardly blame others for taking a pension that they pay into. I agree that changes and reforms need to be made. There should be no double dipping, no padding of wages during last years of employment to artificially increase pension, colas for pensions in the six figures etc. Teachers, like many of us chose their profession partially based on pay and benefits and should not be punished. I don't receive VA benefits but don't begrudge our vets, my house has never been on fire but I am more than happy to pay the taxes that are used to pay the salaries of first responders.


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