Waukegan officials say they can’t afford state proposals
By Judy Masterson email@example.com December 23, 2012 5:38PM
Police officers, teachers, caregivers and other rank-and-file public servants join Illinois AFL-CIO members to protest the state's pension situation and Illinois Gov. Pat Quinn's opposition to arbitrators ruling on AFSCME pay raises and closing facilities, at the Illinois State Capitol Wednesday, Oct. 26, 2011 in Springfield, Ill. (AP Photo/Seth Perlman)
Updated: January 25, 2013 6:15AM
School officials in Waukegan District 60, where the levy has already been maxed out under the tax cap, argued that they could not afford to what amounts to a $7.3 million cumulative impact over five years under an Illinois House-proposed .5 percent annual phase-in of increased payments to Teacher Retirement System pensions. Under the Senate proposal, the bill after five years would double — to $14.6 million.
“House Bill 6258 is bad and Senate Bill 1673 is worse,” said Jules Gaudin, District 60’s deputy superintendent/chief operations officer.
Mark Kiiskala, director of financial planning and research for Lake County’s largest school district, said larger TRS payments would come from the district’s education fund, which is fed by shrinking property-tax revenue.
“EAV (equalized assessed value) is falling dramatically in Waukegan,” Kiiskala said. “We expect education-fund proceeds will be $6 million less for tax year 2012.”
Gaudin also pointed to the HB 6258 proposal to increase member contributions.
“That reduces the net take-home pay of those teachers,” he said.
“We’re not a rich district, we don’t have a gigantic reserve we can draw upon,” said Gaudin, noting that the district gets approximately $4,000 per student in property-tax extension money, compared to more affluent districts that receive between $10,000 and $15,000.
“Whenever expenditures go up, it’s never good,” said Brian Luosa, payroll manager.
Mike McGue, president of the Lake County Federation of Teachers, said shifting a larger share of pension contributions to districts could work if they were granted levying power.
“That means every individual district, every school board, would make decisions on whether they would levy,” McGue said. “If not, they would have to find savings someplace else. One big place is at the negotiating table.”
McGue foresees the necessity of a guarantee to districts on the annual level of state funding.
“They’ve missed payments in the past,” he said. Last year, they only paid 89 percent of what they owed. The year before they missed one or two of the final payments. This year, the Illinois State Board of Education has just come out and said, ‘We’re only paying you
89 percent and you’ll get it in equal amounts.’ If districts have a guaranteed foundation level, they could budget for everything.”
“Ideally, what this ought to be tied to is some long-term property tax relief,” McGue said.
“A perfect vehicle is the temporary income-tax hike. Extend that and use some money for meaningful property tax relief, or look seriously at a change to a graduated income tax and use some of those revenues for property tax relief.”