Unit 5 Not A Fan Of Rauner Proposed Pension Cost Shift | WGLT

Unit 5 Not A Fan Of Rauner Proposed Pension Cost Shift

Feb 15, 2018

Unit 5 officials are not thrilled with Gov. Bruce Rauner's proposal to shift pension costs from the state to local school districts.

The governor proposed shifting pension costs over the next four years, saying it would give districts an incentive to control pension costs if they paid for it themselves.

"We do not have the room in any of the current levies, like the education fund for example, to come up with the dollars to pay for that expense," said Marty Hickman, Unit 5 business manager.

Hickman said Unit 5 is already running a deficit thanks to years of underfunding from the state. He said Rauner's proposal would double the annual deficit in just the first year of the four-year shift.

He said the cost for year one of the shift would be $1.5 million. Over four years it would increase Unit 5 costs by $6 million per year.

Hickman said it is unclear whether the state would allow schools to levy a different tax for pension costs as Illinois municipalities do. Rauner has often railed against high property tax rates in the state and worked to cap rates.

Rauner also proposed adding about $400,000 per year in state funding next year, not enough to offset the pension cost shift.

Even if partly offsetting increases happen each year, Hickman said the extra cost to the owner of a $165,000 home would be over $100 a year after the switch is complete.

"The issue with underfunding the state pension was not created by the local districts. It was created at the state level. And pushing those expenses down to the local districts at this point without the revenues to offset it is just not fair," said Hickman.

Public colleges and universities would also be affected by any pension cost shift, including Illinois State University.

ISU spokesperson Eric Jome said it is too early to have accurate numbers, and the legislative picture is far from clear. But Jome said there would be an impact to ISU finances. He said it could amount to another reduction in state support for the institution.

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