Illinois Governor Vetoes Education Bill as Budget Wrangling Continues in Several States -- Update

Illinois Republican Gov. Bruce Rauner followed through on his threat to veto a school funding measure Tuesday, as budget and spending issues continue to roil several states a month into the new fiscal year.

Illinois lawmakers last month overrode Mr. Rauner's veto to pass the first budget in more than two years, ending a standoff that led to a massive backlog of unpaid bills.

But Connecticut, Rhode Island and Wisconsin are still negotiating budget documents for the 2017-18 fiscal year, according to the National Conference of State Legislatures. All three states failed to pass budgets by their July 1 deadlines.

Connecticut's legislature granted final approval Monday to a $1.5 billion labor concessions agreement that will put a dent in the state's projected $5 billion budget deficit, and the Rhode Island Senate is set to vote Thursday on a $9.2 billion budget deal that has already cleared the state's House of Representatives.

In Wisconsin, lawmakers are debating revenue-raising measures to help solve a roughly $1 billion transportation funding shortfall. Republican Gov. Scott Walker has pledged to veto a gas tax increase while championing a $3 billion incentive package to encourage Foxconn Technology Group to build a major industrial facility in the state.

Meanwhile, Minnesota Democratic Gov. Mark Dayton defunded the state's Republican legislature after lawmakers passed a $46 billion budget in a May special session that included a $650 million tax cut bill the governor opposed. Lawmakers took Mr. Dayton to court, where a county judge on July 19 ruled the governor's veto of the legislature's operating budget unconstitutional.

The governor appealed that ruling last week, though the budget remains in place.

In Illinois, Democratic lawmakers have been holding on to the education funding bill since May and are now counting votes for a potential override in the state's General Assembly weeks before classes begin.

Mr. Rauner called a special session that began last week focused on approving a new K-12 school funding formula. A $36 billion budget package passed in July over the veto of the governor included a funding increase of roughly $350 million to K-12 schools, but the state must still establish a mechanism to distribute the new money.

The General Assembly approved legislation two months ago to enact a funding formula allocating state money to the neediest school districts first, outlined in Senate Bill 1.

But the governor used his veto power Tuesday to rewrite the bill, eliminating several of its provisions, including roughly $221 million in extra funds that would go toward covering the cost of the hard-pressed Chicago Public Schools' teacher pension system. The governor has complained the new funding proposal is preferential to CPS -- the only school district in Illinois that funds its pensions without state aid.

"With my changes, our state ensures that enough resources flow to children in the poorest and most disadvantaged school districts across the entire state," Mr. Rauner said in a news release Tuesday. "And my changes ensure that the education funding system in our state is fair and equitable to all students in Illinois."

Responding to the governor's action, Chicago Mayor Rahm Emanuel said in a news release: "It is well past time for Gov. Rauner to stop playing politics with our children's futures, start demonstrating leadership, and ensure a child's education isn't determined by their ZIP Code or his political whims."

Under legislative rules, lawmakers would need a three-fifths vote of both chambers to approve the governor's changes or override his veto. If lawmakers are unsuccessful in either of those efforts, the bill dies.

Officials with the state Board of Education said the new funding formula must be signed into law by early August to give the board enough time to issue vouchers for state aid payments to the Illinois State Comptroller by Aug. 10, when most school districts are expecting their first payments.

The current backlog of vouchers awaiting payment by the comptroller to school districts totals roughly $1.2 billion.

(END) Dow Jones Newswires

August 01, 2017 16:01 ET (20:01 GMT)