Pensions

Our View: ‘Penalty tax’ gone, schools can spend on low-income students as they should – Opinion – Rockford Register Star

Illinois lawmakers had been stealing money meant for low-income students for about a decade because of their own inability to properly finance pensions.

No more. House Bill 656, which Gov. Bruce Rauner has signed, puts an end to the “penalty tax” school districts had to pay when they hired certified staff using federal Title 1 money.

The elimination of that penalty will give school districts the flexibility to hire what their students need most or hire more of what their students need most.

“You could have 40 tutoring hours, now you can have 80,” said Rockford Superintendent Ehren Jarrett. “Everything will be multiplied and it will have the impact Title 1 was supposed to have.”

Title 1 dollars come from the federal government and are designed to help schools that serve a high concentration of low-income students.

However, Illinois has been taking those dollars from schools to help pay teacher pensions. This year, school districts would have had to contribute an amount equal to 45 percent of a certified teacher’s salary to the Teachers Retirement System. The rate has been growing over the years because it was indexed to Illinois’ unfunded pension liability.

TRS, the largest and costliest of Illinois’ pension programs, is $61.6 billion short of what’s needed to cover future benefits. That’s not the fault of school districts or teachers. It’s the fault of Illinois legislators who have neglected their obligation to properly finance pensions. Instead of living up to their obligation, lawmakers found a way to partially pay for pensions by taking money from schoolchildren who can least afford it.

HB 656 puts $1.4 million back into Rockford Public Schools to directly serve the neediest students, according Jarrett, who said he is “grinning ear-to-ear” over passage of the legislation. The change does not affect individual teacher pensions, but puts the pension burden back on the state and frees up federal funds for their intended purpose.

“It’s going to change how we spend about $14 million next year,” Jarrett said. “Now a teacher that would cost $80,000, that they were charging us $130,000 for, is back to costing $80,000. We can spend those dollars differently and hire a lot more certified staff.”

Besides being bad public policy that was unique to Illinois, the penalty limited a school district’s flexibility on how best to spend federal dollars.

“If you hired a certified person you got pennies on the dollar and if you didn’t you probably bought stuff that probably wasn’t what you would have chosen to spend the money on,” Jarrett said.

HB 656 did not get nearly the fanfare of Senate Bill 1947, the school funding reform bill that Rauner signed last week, but “this was every bit as important to us because of how it will allow us to spend federal Title 1 dollars, but also federal special education dollars,” Jarrett said.

Jarrett had been complaining about the loss of Title 1 funds for years but it wasn’t until 2015 when Rockford Register Star reporter Corina Curry wrote about the practice that there was much movement to change the system.

“Special kudos to (state Sen. Steve) Stadelman for his work in sponsoring the bill, but all five of our local delegation were very supportive of this legislation,” Jarrett said. “They’ve been championing this for multiple years and it’s been across the aisle, which is awesome.

“This was an issue I was personally very passionate about, but the work of our local delegation, the Register Star and Stand For Children (a statewide education advocacy group), which helped make a complex issue understandable, created a force multiplier to get this done.”

Illinois still has a long way to go before it offers equitable education to all its school children no matter where they live, but lawmakers have helped level the playing field for low-income students with their votes on HB 656 and SB 1947.

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