Pension reform legislation that would shift responsibility for teacher retirement from the state to individual school districts was introduced in the Illinois General Assembly last week with the potential to drastically change schools in Deerfield and Highland Park.
Authored by state Rep. Elaine Nekritz (D-Northbrook) and state Rep. Daniel Biss (D-Evanston), the proposed bill does a number of things to help ease the unfunded portions of pensions for a number of public employees including teachers.
Though most of the provisions affect the state as a whole, shifting the burden of teacher pensions from the state to individual school districts will put an added though not unexpected burden on Deerfield Public Schools District 109, North Shore School District 112 and Township High School District 113.
“We don’t know what’s coming from the state,” District 109 Assistant Superintendent for Operations and Finance Greg Himebaugh said Nov. 12 at a Board of Education meeting when explaining a reason to hike the real estate tax levy the maximum amount.
The problem could become more acute for Deerfield and Highland Park schools because they can increase the tax levy no more than 5.5 percent or the amount of the consumer price index, whichever is lower, according to state law.
“We cannot raise property taxes to pay for an increased pension burden,” Himebaugh said. “We and all districts are subject to the tax cap and none of the proposals being discussed offer districts the ability to tax beyond the cap to pay for the increased costs.”
One solution as Himebaugh suggests, is allowing school districts to increase property taxes at a greater rate. That could be coupled with a reduction of state income taxes. Neither is a solution Nekritz sees as a current possibility.
Tax Relief From State Is not Likely
“I don’t think that would fly,” Nekritz said. “We will phase this in slowly,” she added when saying there would be no change to the property tax cap. “There is no way around a difficult decision right now.”
One person who intends to oppose the legislation when she gets to Springfield is state Sen. Elect Julie Morrison (D-Deerfield). She was against the idea during her campaign and she has not changed her mind.
“It’s something I’m not in favor of, absolutely not. It’s a slippery slope. This will just open the flood gates,” Morrison said. “The state is responsible for this huge debt.”
Himebaugh has been developing contingency plans if the legislation should pass. He has been adjusting his long term budgeting for just a possibility.
“Every district will have to find other ways (such as) cost cutting via higher class sizes, eliminating savings/reserves to afford the additional burden,” Himebaugh said. The current pension cost for District 109 teachers is $1.5 million which is slightly in excess of three percent of the District’s operating budget, according to Himebaugh.
State May Step in With Other Aid to Education
Nekritz is hopeful as the obligation is transferred to individual school districts the state will be able to give other aid to education.
“We have not been able to spend anything else on education because of the pensions,” Nekritz said. “This will allow us to spend on education in ways that will make sense.”
Officials at Deerfield and Highland Park High Schools are taking more of a wait and see attitude, according to Communications Director Natalie Kaplan. Kaplan is hopeful the burden will be incremental and not more burdensome than what is contained in the proposal by Nekritz and Biss.
“If an incremental increase is decided upon, we hope that annual increase does not exceed a one half percent for any parties annually,” Kaplan said. “This would at least make the annual impact more sustainable for the parties involved.”
State Rep. Elect Scott Drury (D-Highwood) was contacted for comment for this story Thursday and did not respond by deadline for the article.