Confirmation came from Senate President John Cullerton’s office yesterday morning: The chamber will convene Sunday at 2:00 p.m. to take up Governor Bruce Rauner’s SB1 amendatory veto.

Later in the afternoon, House Speaker Mike Madigan tossed a wet blanket on the annual Governor’s Day at the State Fair, calling for the chamber to convene on the same day. His schedule is as follows:

• 9:00 a.m., Aug. 16: House Approp. Elementary and Secondary Education Committee, Room 114
  


• 11:00 a.m., Aug. 16: House to convene a floor session
  

After House Democrats held a mock-hearing of Rauner’s SB1 amendatory vetoes during a meeting of the House Appropriations-Primary and Secondary Education Committee in Chicago, Sen. Andy Manar (D-Bunker Hill) took to the airwaves for yet another SB1 advocacy presser, this time with Rep. Jehan Gordon-Booth (D-Peoria).

Finally, Rauner held two bill signings yesterday: Sen. Pres. Pro Tempore Don Harmon’s (D-Oak Park) SB8, a procurement omnibus, and SB1413 from Sen. Michael Connelly (R-Naperville) which waives birth certificate duplicate fees for those recently released from jail.

The House Appropriations-Elementary & Secondary Education Committee will meet today in Chicago for a hearing on shell bill SB1947 or, more specifically, the House Floor Amendment 3 it carries.

On Friday afternoon Governor Bruce Rauner released a list of his most recent appointees by name and position. Below you’ll find a run-down of each of the new players. The same day, Rauner signed 14 bills into law. We’ve scrutinized and summarized the new laws (which range from criminal justice reforms to breastfeeding provisions) and have provided readers a briefing on each.

As news of Governor Bruce Rauner’s amendatory vetoes spread this week, education organizations shared their reactions with The Daily Line.

Michael Chamness, of the Illinois Association of School Administrators: “We would hope that sooner rather than later, either the amendatory veto is overridden, upheld, or there’s a compromise. Because without any of those three things happening we have no mechanism to move funding to schools, and this needs to be resolved as soon as possible. We can support legislation that replaces the outdated broken current formula with the Evidence-Based model and holds all school districts in Illinois harmless. In other words, no red numbers.”


Roger Eddy, of the Illinois Association of School Boards: “When you’re messing with the formula, when you pull one lever another lever gets affected. So we’re still analyzing the effect of all the proposals and the changes that (Rauner) made. Whenever you change any one component of this–whether it relates to the minimum funding level, whether it’s the removal of the block grant, or the the pension considerations--it affects base funding minimums and even the tier status of the school. So you almost have a do a calculation to make sure everyone is in the black. That’s important to us because one of our foundational principles was that there would be no red numbers.”

Jim Reed, of the Illinois Education Association: “SB1 looks very different as sent to the governor versus how it was drafted. So if you take the language the governor has changed in it, it really looks like a different bill. From that perspective, we have really got to look at it as two separate entities, and whether or not it’s substantially the same as it was when going through the General Assembly. At that time, we thought the very important part of the bill was the idea of addressing school funding to be sure we addressed low-income districts and poor performing districts, and bring them up.”

Fundraising saw an uptick this week as campaign season rolled on. While the Senate holds the fate of school funding we’ll continue keeping tabs on A-1 filings every week. Meanwhile, a slate of lawmakers, many Republicans among them, have announced this week they’ll no longer be seeking office, opening up four more seats ahead of the 2018 election. Here’s is a round-up of those filling their coffers and those saying their goodbyes:   

Senate A-1s For The Week

• A-1, Dave Syverson Campaign Committee


• A-1, Citizens for John Cullerton for State Senate


• A-1, Friends of Heather Steans


• A-1, Friends of Toi Hutchinson


• A-1, Friends of Dave Koehler


• A-1, Friends of Mattie Hunter


• A-1, McGuire for Senate


• A-1, Citizens for Pamela J Althoff


• A-1, Friends of Terry Links


• A-1, Julie Morrison for State Senate


• A-1, Friends of Clayborne


• A-1, Bennett for Senate


• A-1, Citizens for Al Riley

Retiree Roundup

• Rep. Robert W. Pritchard (R-70)


• Rep. Barbara Wheeler (R-64)


• House Deputy Republican Leader Patricia R. Bellock (R-47)


• Rep. Bill Mitchell (R-101)

The group joins four other Republicans General Assembly colleagues this year in announcing they will not seek re-election in November. Others who have announced in recent months include: House Assistant Republican Leader Chad Hays (R-104), Sen. Tim Bivins (R-45), Sen. Christine Radogno (R-45), Sen. Kyle McCarter (R-54).

If the Evidence-Based Funding formula in Senate Bill 1 were a Jenga tower, the impact of Governor Bruce Rauner’s vetoes on the Property Tax Extension Limitation Law (PTELL) and Tax Increment Financing (TIF) provisions would be akin to pulling two wooden planks from the base. If the move is cautiously calibrated the tower might remain standing afterward, but even so the game is unlikely to last long.

Without a steady hand, here’s how it could end.

The SB1 formula and the formula in force today have in common a key component in the central per-district dollar calculation: Equalized Assessed Value. In the old formula and new, the district’s EAV–a result of a district’s property values and tax relief–is added to other concerns in order to arrive at the amount of state funds a school district will receive. In our Jenga tower, EAV is not a single plank, but rather a full layer of wooden tranches.

SB1 keeps most of the current TIF language of the School Code, which holds that when a school district’s unique EAV is being composed you take the total property and tax value for the area then remove any spikes in the numbers caused by new developments in the area’s TIF districts (at least until those new developments have paid off their tax debts). The idea is to ensure that the school dollars coming back to a district are based on the current–not future–property tax revenue the district is able to generate.

Rauner’s veto, however, adds the TIF spikes into a district’s EAV. Meanwhile, the higher a district’s EAV, the fewer funds it receives from the state. Using Chicago as an example, Bobby Otter of the Center for Budget and Tax Accountability explains the concept:

“Chicago has about $6.5 billion in EAV TIF districts. That doesn’t show up under EVA, either real or used, in any General State Aid data. That’s not in there. So if you’re going to add TIFs back in, you’re adding $6.5 billion in EVA into the model. Chicago has an EVA of around $65 billion, and if you add in TIFs you get over $70 billion, but CPS can’t access any of that additional money,” he said.  

A Full List of TIF Districts By County

Aside from inflating the EAV, this move destabilizes the tower in other ways. The Evidence-Based Funding formula takes some of the volatility out of state aid shortfalls in areas where property values have fallen. It does so by creating a new Adjusted EAV, which is a rolling three-year average EAV. This Adjusted EAV is also multiplied by the local tax rate to get a clearer picture of real receipts in the area, the product of which is then used to determine school district’s local tax capacity and school adequacy targets through separate formulas.

Removing PTELLs

Without the inclusion of other counterbalancing economic forces, a two-year TIF spike, while temporarily profitable for an out-of-town developer, could lower state funding to an already-struggling school. Rauner doesn’t include any such counterbalances in his TIF vetoes. Instead, he removes the PTELL limitation plank.

PTELLs are treated much the same as TIFs in the current School Code in that they’re carefully accounted for during the EAV construction process to ensure state dollars reflect actual property values instead of inflation rates.

But Otter said the current model may no longer fit the times. “Originally, the intention of PTELL was to help homeowners in some areas, because we are so reliant on property taxes to fund education in the state it was a way to slow down property taxes on a year to year basis. But the calculus has kind of changed now with inflation being so low.”

SB1 tries to put some space between property tax pressures of low-income districts and the normal costs of inflation by creating a PTELL EAV, which Rauner vetoed. This value is found by taking the normal EAV, multiplying it by any yearly Consumer Price Index increase, then adding or subtracting the EAV of any new properties as they’ve come and gone over the year.

A Map of PTELL Counties

The PTELL EAV plays the same role in the same calculations as SB1’s new Adjusted EAV, affecting just as many layers of numbers across the board. And by striking its protections from the bill, Rauner risks many of the same financial imbalances as he does with his TIF veto.

“It’s an interesting move because a lot of the suburbs are going to be affected by this. Most of the suburbs have PTELL districts. What it’s going to do is raise the EAV of a number of these districts, especially in the Chicago area,” Otter said.

A List of PTELL Districts by County

If Rauner aims to keep the Evidence-Based Funding formula balanced, he may be in luck. Many of the same lawmakers currently negotiating the fate of SB1 post-veto were serving together in 2014 on the Senate Education Funding Advisory Committee, and even as negotiators Sens. Jason Barickman and Andy Manar now struggle to hash out a Rauner-friendly agreement this year, the two concluded together with other members in their final report that PTELL funding needed a close examination.

In a presser after Rauner’s vetoes, Manar reserved his strongest language for criticism of the two vetoes, calling the move a “a scalpel right at the heart of a small number of school districts, many of which are least funded in the state with the highest rates of poverty and the highest property tax rates. That is deliberate... and only people with knowledge and know-how would be afforded the ability to do that.”

Although the PTELL and TIF exemptions affect Cook and the collar counties as much as downstate, a Democratic Senate analysis estimated as many as 60 districts to be affected by these changes. As a result, the issue stretches across party lines and is likely to become the first major flashpoint in the latest chapter of negotiations.

In a total of 36 amendatory vetoes, Governor Bruce Rauner unleashed a competing plan for Democrats and Republican negotiators to chew on through the coming week. Substantive vetoes ranged from relocation of Chicago Public School pension funding to the recalculation of teacher salaries. The Daily Line gathered the changes in a rundown for readers here.

After yesterday’s big reveal, the Senate now has 14 days to either override or approve Governor Bruce Rauner’s veto. In either case, the Senate will have to draft at least one trailer bill, despite the fact several Democrats from the chamber have confirmed that another convening is unlikely this week. All eyes now turn to Senate President John Cullerton and the bipartisan group of SB1 negotiators who are tasked with wrapping up the business of the bill before school debts are due. If you missed the veto signing, here’s the highlight reel:

It finally happened. Although not present in the Capitol, Senate President John Cullerton released the hold on education-funding reform bill SB1 late yesterday and sent it to the desk of Governor Bruce Rauner. Once Rauner returns his vetoes, the Senate has 15 days to either accept Rauner’s vetoes or override him. After chambers adjourned for the day, SB1 negotiators took to House Speaker Mike Madigan’s office, spending more than an hour behind closed doors before disappearing through side exits. Republican negotiators were then seen going into Rauner’s office.  

In our Friday July 28 edition, The Daily Line incorrectly reported that to accept the Governor’s recommended changes in his amendatory veto, the Senate would need a simple majority vote. Senate President John Cullerton’s spokesperson John Patterson corrected us in an email the same day, clarifying that “accepting the anticipated changes in the Governor’s amendatory veto would require a three-fifths vote (not a majority vote) because those changes are a new law taking effect after May 31.”  

For those whose concerns pivot on parliamentary maneuvers, this is where the game gets interesting.

In his email, Patterson said that several outlets had reported that a “simple majority” was needed for accepting the Governor’s specific recommendations for change, and that internal discussions were had about the matter.

As reported, Senate Rule 9-6 does indeed hold that when a bill has received a normal majority vote in favor of  “acceptances of specific recommendations for change [from the Governor], the Presiding Officer shall declare that the bill or item has been passed or restored over the veto of the Governor, or that the specific recommendations for change have been approved as the case may be.”

However, Patterson pointed The Daily Line to an opinion issued in 1972 by then Attorney General William Scott which shaped the nature of the veto process and effectively raised the necessary vote count needed to accept the Governor’s vetoes (given the specific conditions around SB1’s passage). The opinion, issued at the request of then Superintendent of Public Instruction Honorable Michael J. Bakalis, clarifies the effective date of a law raising the minimum salaries for full-time teachers and, in doing so, sets two conditions for veto-acceptance on bills meant to immediately go into effect.

Leaning on Article IV Section 10 in the state constitution, Scott opines that “unless the General Assembly provided for an earlier effective date and the bills received a three-fifths majority,” the act passed after June 30, 1971 and signed into law Nov. 17, 1971 would not become effective until July 1 of the following year.

In the case of teachers’ salaries, Scott’s opinion ultimately held back teacher raises for another 8 months. But in the case of SB1, the bill’s language provides clear legislative intent for the effective dates. In order to honor those dates, a three-fifths majority is the bar the Senate must meet in order to accept Rauner’s changes and get immediate funding flowing to schools.

Perhaps less interestingly, but certainly worth addressing, Patterson also pointed out our description of a Wednesday shot Cullerton took at Rauner. We wrote that it was a swipe at Rauner’s “mental health,” and Patterson notes the President’s words were “mental state.” It’s a common legal phrase as pointed out by NPR Illinois’ Brian Mackey and a necessary distinction to make given the rebuke Cullerton received the same day at the hands of the Illinois’ Mental Health Division Director Diana Knaebe. Nostra culpa.

Today’s the day. Party liaisons from both sides of the aisle, having spent the weekend negotiating the fate of education-funding reform bill SB1 are slated to conclude their work so Senate President John Cullerton can deliver the bill to Governor Bruce Rauner’s desk as promised. A pre-veto meeting between the two, indicated on Friday, is anticipated once the bill hits Rauner’s desk and before it returns to the Senate. Meanwhile, Senate Democrats have confirmed that with so many members out-of-pocket for seasonal travel and district obligations, wrangling a vote may not be possible until later in the week.

• On the Democrats’ side of the table, chamber leaders appointed the following negotiators Friday to hammer out an agreement: Senate Assistant Majority Leader Kimberly Lightford (D-Westchester) whose district includes one of the state’s most vulnerable school districts, SB1 sponsor Sen. Andy Manar (D-Bunker Hill), House Majority Leader Barbara Flynn Currie (D-Chicago), and Rep. Will Davis (D-East Hazel Crest).
  
  


• On the Republican side: Senate Assistant Republican Leader Jason Barickman (R-Bloomington) who said Friday Rauner would be willing to meet with Cullerton after receiving the bill, Sen. Dan McConchie (R-Lake Zurich), Rep. Avery Bourne (R-Litchfield), and Rep. Bob Pritchard (R-Sycamore).
  
  


• The central points of disagreement between the parties has been whether to eliminate Chicago Public Schools’ block grant funding while incorporating CPS’ $506 million legacy teacher pension debts (and $221 million in pension “normal costs”) into a school funding formula, or whether to wrest CPS pension reform into a separate bill. Members of both parties have previously confirmed that they would be able to compromise on issues surrounding CPS pensions if a suitable trailer bill could be crafted in time to accommodate reforms.  
  

Keep an eye on the @TheDailyLineIL today where we’ll be reporting out the weekend compromises made by the SB1 negotiating team, tracking the bill’s movement between branches, and reporting the highlights of leadership press conferences.  

The Senate is poised to cast a contentious vote in the coming week, while campaign season begins and the 2018 Senate elections inch closer. The following is a glance at those Senate campaign funds which filed A-1’s in the past week:

“Déjà vu,” said Governor Bruce Rauner at yesterday’s press conference when Senate President John Cullerton again declined to dispatch SB1 for the governor’s signature. We’re likely to hear the same joke today, as Senate Democrats–hardly present in the chamber yesterday, and missing Cullerton–confirmed an anticipated low-turnout through Friday and likely into Monday, when Cullerton has promised to send Rauner the bill.

As Senate President John Cullerton and House Speaker Mike Madigan continued to urge Governor Bruce Rauner to meet for negotiations and sign SB1, Republican legislators reacted to the bill’s delay on the first day of special session.

Sen. Jason Barickman (R-Bloomington)

“(Cullerton) has made a political observation that by holding that bill, he can put on pressure to do one of two things: one is to change the governor’s mind into signing a bill which he has called a Chicago Bailout and promised to veto, or two, that the pressure will build in a manner that convinces enough Republicans to override the governor. I see both of those options as being unbelievably impossible… I do not believe that the votes exist to override a veto by the governor. ”

Rep. Sheri Jesiel (R-Antioch)

“It’s kind of ironic that this bill when it was drafted was drafted to help those school districts with a concentration of poverty and yet this crisis that’s being manufactured and created by Pres. Cullerton and Speaker Madigan by not sending the bill to Gov. Rauner? Those are the same school districts immediately affected because they do not have savings in order to open up school in the fall.”

Rep. Peter Breen (R-Lombard)

“(Democrats) are desperately trying to get the Governor’s amendatory veto language out so they can start attacking it. To say this is going to take two weeks to negotiate is silly. We were almost to an agreement when we left last special session. It wouldn’t take more than a few days. There are several versions of Republican proposals...The issue is: Are you going to take the back debt of the Chicago Public School pension system and put it on the back of state taxpayers? It’s not just next year. Putting in a new funding formula locks you in place for 10 years or more.”

Rep. Terri Bryant (R-Mount Vernon)

“I’m from the deep south where categorical payments are very important and are very late getting there... For a lot of the rural areas where you don’t have the opportunity to take a cab or get on the L, and whatever transportation you have is not really an option in my part of the state. You have to have money to pay for those buses. And even if you do have the money for them, there are still students who are on those buses an hour and a half, all one way, all driving. In the city, maybe you drive an hour and a half you go six or seven miles. Where I live, if you drive an hour and a half, you go 60 to 80 miles. So it’s really important to get (funding) moving.”  

Special Session started with a thunderclap but ended in dry lightning, as Governor Bruce Rauner demanded education reform bill SB1 be sent to his desk immediately by Senate President John Cullerton, who then spent part of the day explaining why he won’t do so. The delay is likely to last until Monday, when Cullerton says he’ll send Rauner the bill after giving him until Friday to consider a private meeting instead. In an afternoon press conference he offered the following reasons for withholding the bill and not following standard legislative procedure.

Continuing our budget breakdown series, the following are the fast facts about Medicaid provisions found in the state’s new budget for FY2018.

$9.507 billion has been allocated to Medicaid funding for FY2018, including federal matching funds and intergovernmental transfers, in the recently-passed SB6 budget. The Hospital Provider Fund and County Provider Trust provide $3.1 billion and $2.5 billion of that total, although the Drug Rebate Fund also brought in $2.4 billion this year. 

While the the FY2018 Illinois budget finally appropriated a significant sum to pension payments, over $6.6 billion to the state’s five employee pension funds, it still falls short on the $7.87 billion appropriation need projected by COGFA for this year, and does not address the $129.5 billion in unfunded pension liabilities.

After Senate President John Cullerton declined to send education funding reform bill SB1 to Governor Bruce Rauner’s desk on Monday, Gov. Rauner called a special session of the General Assembly, convening Wednesday at noon. (Read Official Proclamation) As legislators head back to Springfield, here are the main points you need to know:

The latest gaming bill effort, one that would legalize fantasy sports, seems doomed to die in the House this year, as the bill’s sponsors express little faith it will move. In addition, sponsors and lobbyists connected to the bill, HB479, believe House Speaker Mike Madigan is reluctant to call up gaming bills for a vote.

As the dust settles in Springfield after the SB6 showdown, outposts of higher education across the state are checking their mailboxes for the $7.945 billion allotted to them by the new law. Some portions of the money will come faster than others, with $3.2 billion headed toward university employee pension funds. Until then, SB6 provisions for FY17 afford higher education $1,836 billion. Combined with federal dollars and past-due FY17 funding, the sector is slated to receive $4.125 billion for FY18 overall.