Illinois governor offers revamped property tax freeze bill

Reuters News
Posted: Aug 17, 2015 2:45 PM

CHICAGO (Reuters) - Illinois Governor Bruce Rauner unveiled on Monday a revamped bill to freeze local property taxes that hopes to woo Democratic votes by boosting funding for financially struggling school districts, particularly the Chicago Public Schools (CPS).

The measure couples a two-year tax freeze with a $74 million increase in state funding for high-poverty school districts and the creation of a commission to change Illinois' school funding formula. The state would contribute $200 million a year for two years toward pension and healthcare costs at CPS without a reduction in the district's $600 million state grant funding, according to the Republican governor.

The bill also contains elements that Democrats, who control the House and Senate, have been unwilling to embrace. These include allowing local governments and schools to limit collective bargaining, to adopt their own prevailing wage requirements, and to restrict workers' compensation claims.

"This will be a transformational change, improvement for the state of Illinois and allow us to move forward and complete the rest of the budgeting process," Rauner told reporters.

He called on powerful House Speaker Michael Madigan to take up the bill in its entirety and urged individual lawmakers to vote for their residents and not "for some higher power."

There was no immediate comment from Madigan or Senate President John Cullerton on Rauner's proposal.

Illinois on Wednesday will mark its seventh week of operating without a fiscal 2016 budget. Rauner said his administration was negotiating over the budget "almost every single day." In the meantime, certain services and state payroll are being funded under court orders.

CPS, the nation's third-largest public school system, is drowning under rapidly rising pension costs that are largely to blame for a $1.1 billion budget hole. The district last week proposed a $5.7 billion fiscal 2016 spending plan that relies on $500 million in pension savings from the state.

(Reporting by Karen Pierog; Editing by Matthew Lewis)