Illinois hits new fiscal setback over public school funding

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Despite reaching a budget deal to end a record spending impasse last month, Illinois’ fiscal troubles are not over as the state’s Republican governor on Tuesday vetoed a measure that could mean public schools will be forced to go without funding.

Gov. Bruce Rauner received an education funding strategy bill on Monday from the Democratic-controlled legislature, which requested additional funds for Chicago Public Schools and their pensions. Rauner issued an amendatory veto on the measure and sent it back to the state legislature. Rauner said his changes would provide for “a fairer funding system”, adding that state-wide pension reform should be addressed in separate legislation.

In order for the bill to move forward, the state House and Senate will need to either override Rauner’s veto or approve his changes. For that to happen, both chambers will need three-fifths majorities in either direction, something that could prove challenging in a state that has been plagued by partisan gridlock. Without agreement, the bill will die, which means state public schools will not receive funding before classes begin.

As part of a budget deal reached last month, the state government needs to administer a new prescription for public school funding or schools won’t receive anything.

Rauner and the Democratic-controlled state legislature have butted heads for years over spending in Illinois, which has resulted in paralyzing policy gridlock. From 2015 through 2017, the two sides were unable to agree on a budget deal, leaving the state with a $15 billion backlog in unpaid bills, and $250 billion in unfunded pension liabilities. It narrowly avoided being downgraded by the major credit ratings agencies to non-investment grade, or junk, earlier this year – though Illinois still boasts the lowest rating out of every U.S. state.

Earlier this year, Illinois barely broke a record spending impasse at the last minute before it entered a third straight fiscal year without a budget deal.