Illinois legislative leaders reach school funding deal

[August 25, 2017]  CHICAGO (Reuters) - Illinois legislative leaders said on Thursday they reached a deal over a new education funding formula that would restart aid payments to the state's 852 school districts.

Details of the agreement in principle will not be released until legislation is drafted and reviewed, according to statements by leaders of the Democratic-controlled House and Senate.

The four Democratic and Republican leaders are scheduled to meet on Sunday ahead of anticipated House action on Monday.

“Governor (Bruce) Rauner applauds the four leaders in coming to a consensus on historic school funding reform that reflects the work of the School Funding Reform Commission," the governor's office said in a statement.

Chicago Mayor Rahm Emanuel, who controls the Chicago Public Schools, said the deal addresses the fact the city largely funds teachers pensions on its own while pensions in all other school districts are heavily subsidized by the state.

"Never before has Illinois actually agreed to fully participate in paying for Chicago's teachers pensions," Emanuel told reporters. The Chicago school district is the nation's third-largest public school system.

The Republican governor's use of an amendatory veto to extensively rewrite a school funding formula bill passed by the legislature in May stopped the flow of $6.7 billion in state aid to schools as most began classes this month.

While the Senate overrode the veto on Aug. 13, a required three-fifths majority vote was harder to obtain in the House, where lawmakers last week rejected a bill modeled after Rauner's funding formula changes.

Legislative leaders have been meeting since then to broker a bipartisan compromise.

The Roman Catholic Archdiocese of Chicago has pressed for creation of a school voucher program in the talks.

Illinois does not allow school vouchers, while 14 other states do. But sensing a potential shift in policy, teacher unions like the Illinois Education Association have mobilized against the idea, warning members on Wednesday that vouchers would “drain much-needed money from public schools.”

Credit rating agencies have warned that districts that have slim reserves and are heavily dependent on state aid, including the Chicago Public Schools, could face financial pressure and potential rating downgrades from an extended school funding impasse.

The Chicago school system, whose debt is rated junk, was the main target of Rauner's veto action. The governor said the bill unfairly included a bailout for the cash-strapped district.

(Reporting by Karen Pierog and Dave McKinney; Editing by Matthew Lewis and Leslie Adler)

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