Chicago schools: Cuts possible due to pension aid veto

SPRINGFIELD, Ill. (AP) — Illinois Democrats failed Thursday to override the Republican governor's veto of $215 million to help the financially struggling Chicago Public Schools with pension payments as negotiations on an overdue state budget broke down again.

Using its Democratic supermajority, the Senate quickly voted to overturn Gov. Bruce Rauner's move, but the House adjourned for the year Thursday evening without bringing the override question for a vote. Although the House has 15 days to try again, it's unclear if there is enough support in the chamber.

Losing the money would be a huge blow to the finances at CPS, which crafted the current year's budget expecting the funds. Without state support, officials at the nation's third-largest school district have warned of budget cuts and in the past they've said that could include layoffs.

The veto was the latest budgetary battle between Democratic legislative leaders and the former venture capitalist, who has tried since taking office to change Illinois' political system by weakening unions and making the state friendlier to businesses.

Rauner wants Democrats to help him enact part of his agenda, but neither side has budged and that has left Illinois without a budget for 18 months — the longest any state has gone since at least World War II. The gridlock has crippled social service programs and left higher education institutions facing financial uncertainty due to less state support than they've received in the past.

The parties had agreed to the Chicago Public Schools funding in June as part of a six-month spending plan to get the state through the end of the year. But the money promised came with the condition that lawmakers would work on a separate plan to overhaul a statewide pension system that's more than $100 billion.

Democratic Senate President John Cullerton denied Thursday there had been such a deal. Immediately afterward, Rauner vetoed the funding.

"Breaking our agreement undermines our effort to end the budget impasse and enact reforms with bipartisan support," Rauner said in his veto message to lawmakers.

Chicago Public Schools has a "junk" status from credit agencies and narrowly averted a teachers strike in October. Leaders of the 400,000-student district built the $5.4 billion budget expecting the $215 million to pay the employer's contribution to teachers' pensions. The payment is due in June.

Chicago Mayor Rahm Emanuel accused Rauner of "lashing out," calling the veto "reckless and irresponsible."

For months, Chicago Public Schools CEO Forrest Claypool, whom Emanuel appointed, said the aid was necessary to avoid cuts. He said Thursday that school officials and allies would fight the veto and floated the possibility of a civil rights lawsuit over unfair funding practices. Most students in the largely black and Hispanic school district are low-income.

"They should not be pawns in Gov. Rauner's cynical political game," Claypool said.

CPS is the only Illinois school district where local taxpayers, rather than the state, pay the employer's contribution and Democrats have argued that's unfair.

Rauner has been meeting with Republican and Democrat leaders in his office this week to negotiate a budget, but they have made no progress.

Rauner said he's willing to consider another short-term budget agreement, but only if Democrats consider term limits and put a permanent freeze on property taxes. Democrats have said Rauner should drop his demands and focus on a budget without pre-conditions.

The governor has said CPS money must be accompanied by a commitment to fix the state's overall pension debt to improve Illinois' fiscal health.

"The taxpayers of Illinois do not want just another bailout," he said in the veto message. "Let's get back to work to end the budget impasse and put Illinois on the right track once and for all."


Associated Press writer Sophia Tareen in Chicago contributed to this report.