Can you imagine Illinois with a $17 billion budget surplus?
Neither can we. But it does happen — elsewhere. One Midwestern neighbor, Minnesota, had a cool $17 billion cushion to work with less than two years ago when Gov. Tim Walz, now the Democratic vice presidential nominee, and state lawmakers were given the enviable task of what to do with the largesse. Minnesota had squirreled away more of the federal pandemic relief dollars that came states’ way and was also in far better fiscal health going into the pandemic.
We note that unusual situation because Minnesota is a state the Chicago Teachers Union cites frequently when attempting to embarrass Illinois Gov. JB Pritzker into somehow finding $1.1 billion to finance substantial annual teacher raises and the addition of thousands more CTU members to the financially ailing Chicago Public Schools.
Minnesota used some of its massive surplus, as one might expect, on tax cuts to spur growth. But it also agreed to pump more than $2 billion into its public schools. Not a dime in additional taxes was required for the infusion.
Minnesota isn’t the only example CTU lauds. Union President Stacy Davis Gates in a recent Tribune op-ed also pointed to California, saying that Gov. Gavin Newsom a few months ago “figured out how to commit billions more to education” in that state. That’s not a fully accurate description. Newsom and teachers unions in California, facing deficits far more daunting than Illinois’, reached a deal that staved off billions in immediate cuts to education funding while keeping the state on an education-funding trajectory to which it had previously committed. That agreement didn’t mean “billions more”; it was about preserving the billions in the status quo.
Alas, Illinois is in no position — and likely won’t be for years — to replicate Minnesota’s generosity. There has been a broadly supported arrangement in place here since 2017 under which Illinois would chip away at its school-funding problem.
Teachers unions convinced Illinois in that year to agree to transform its approach to K-12 funding, focusing on prioritizing under-resourced schools per a new formula that determined “adequate” budgets for each school system in the state. At the time, the state acknowledged it wasn’t providing sufficient help to schools throughout Illinois and that it would take many years to reach that goal.
If this “evidence-based” formula were to be enforced all at once right now, the state would need to inject well over $4 billion into school systems statewide to achieve adequacy as the law defines the term. What the state agreed to do in 2017 was to increase statewide assistance each year by $350 million. With the exception of one year during the height of the pandemic, Illinois has stayed true to that pledge. That includes the current fiscal year even though lawmakers faced a $900-million-plus deficit before striking a budget deal in late May.
Now, if Illinois enjoyed a $17 billion budget surplus, there would be little debate in this Democratic Party-dominated legislature over whether to make that multibillion-dollar investment in schools right away. The expected reality, however, is quite the opposite. Next year promises to be another rough budget year. The state’s most recent three-year budget projections show a fiscal 2026 deficit ranging from $605 million to $2.6 billion.
These state-by-state examples serve merely to illustrate that every state has different fiscal challenges. CTU’s attempt to shame Pritzker and legislative leaders by asserting that a few other states have been able to pump more cash into their schools is disingenuous and, in the end, counterproductive.
The fundamental reason Illinois isn’t able to follow Minnesota’s example is due to decades of underfunding generous pensions for state employees. Illinois has attempted gradually over the past 30 years to reduce the yawning funding shortfall to meet its future pension obligations, with only limited success. In the current fiscal year, which began July 1, pension contributions accounted for 20% of the state’s $53.1 billion budget — the single largest item on the ledger.
Additionally, it’s not just schools that feel the pinch from underfunded pensions. Public needs of all sorts are shortchanged. Among those critical public needs, by the way, is relief from property taxes, which are the primary means for funding schools and are becoming so high that increasingly they’re forcing long-time residents out of their homes.
Next year, Pritzker and legislative leaders will be tasked with responding to a $700 million funding shortfall for Chicago-area transit agencies — while still needing to pump more money into the retirement systems and almost certainly plug a deficit.
Meanwhile, Illinois’ total tax burden by any measure is among the highest in the nation. There simply is no question that the state’s uncompetitive tax position is a key reason for its subpar economic growth. Stagnant population and a lagging economy lead to tepid, if not nonexistent, growth in tax and fee revenue for governments. And the cycle continues.
So when the Chicago Teachers Union makes these arguments about what other states are doing for their schools, the unpleasant truths outlined above don’t change.
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