Education Jobs Outlook Grim
The bottom line impact of this budget creates a grim outlook for employees of public education who have received layoff notices for next school year. Teachers, faculty and staff in P-20 could see thousands of jobs disappear in September. P-20 education administrators are faced with difficult decisions based on one question: will the state pay the money it has promised for the 2010-11 school year, when it has failed to make payments on $2.2 billion owed for this school year?

           

The budget plan contained in House Bill 859 makes cuts in education and state agency operations. The agency cuts may affect state personnel represented by the IFT.

 

On a positive note, the House approved a pension borrowing plan of $3.7 billion to make its payment to pension systems for FY 2011. The Senate will take up the pension borrowing plan this week.

 

Overall, a one-year solution to the state’s $13 billion deficit is proposed by the following revenue actions which are under consideration in the General Assembly:

            $3.7 billion borrowed for the state’s pension payment 

            $1.2 billion collected from the long-term tobacco settlement fund

            $1 billion via inter-fund loans from agency surpluses and repaid in 18 months

            $250 million revenue from a tax amnesty collection program

            $300 million cut from education

            $170 million cut from state agency personnel and operations

            $6 billion debt carried over to FY 2011, owed to schools and service providers

 

The budget process is expected to be completed this week although several pieces of the budget puzzle remain out of place. Until the budget is finalized, the Illinois State Board of Education is unlikely to offer an estimate on the Foundation Level for the 2010-11 school year. In FY 2010 (09-10) the foundation level was $6,119. 

The combination of flat state money and changes in local property values could cause the foundation level to drop. Further, if the state runs short of the money it has obligated, it could be forced to prorate GSA and poverty grant funds. A proposed change in SB 3662, Amend. #3, pages 133-134, would alter how the state pro-rates its GSA and poverty grant funds. Under the new language, both would be prorated in tandem. In current law, GSA is paid in full first and poverty grant funds are pro-rated. Given the dire budget condition of the state, the change is considered good policy so that schools with high poverty counts won’t bear the full burden of pro-ration. 

Federal legislation to extend the stimulus plan for one year, providing Illinois with $975 million for education, is under consideration in Congress but delayed due to “deficit politics”. If The Harkin plan were to pass, the General Assembly would hold a special session to appropriate and reallocate resources.

           

            Flat Funding-

            General State Aid (GSA) at 2010 levels, $4.6 billion

            Hold Harmless GSA at 2010 levels, $15.6 million

            State university support at 2010 levels, $1.4 billion

            Illinois Student Assistance Commission at 2010 levels, $425 million           

 

            Budget Reductions-

            Cut $300 million from mandated categorical grants and programs

                        Disabled Tuition $157 million, a $24 million cut

                        Disabled Transportation $357 million, a $73 million cut

                        Special Education $275 million, a $59 million cut

                        Special Education Personnel $368 million, a $91 million cut

                        Cut community colleges by $27 million, a 7.5% reduction 

                        Cut state agency personnel & operations by 5%, $170 million 

           

Despite months of intense lobby efforts by the IFT in a coalition of education and human service providers, the House did not act on any revenue proposals such as HB 174 passed by the Senate last May.

Among the state’s debts for 2009-10 are $1.4 billion owed to K-12 schools for mandated categoricals and other grant lines, and $840 million owed to higher education.

           

House action Tuesday set the major pieces of the final budget in place but other proposals such as a cigarette tax are still pending. The cigarette tax if passed would restore full funding for P-12 categorical programs.

           

            HB 859 Amendments 3 & 6 – Budget Appropriations passed in the Senate and House;

            SB 3662, Amendment 3 - Budget Implementation Bill (BIMP), passed the House, pending vote in the Senate;

            SB 3660, Amendments 9 & 12 - Emergency Budget Act with $1 billion in tobacco settlement revenue and giving the Governor broad powers to   
            direct spending and withhold funds, passed the House, pending vote in the Senate;

            SB 3514 – Pension Obligation Bond payment to pension systems, passed the House, pending vote in the Senate;

            SB 44 - Cigarette Tax raising $300 million to fund categorical programs cut in HB 859, passed the Senate, on hold in the House;

            SB 377 - Tax Amnesty Debt, passed the House, pending vote in the Senate, expected to raise $250 million for FY 2011.

            HB 991 – Authorization to spend cigarette tax money on categorical cuts and bumps up the appropriation of state money for ISBE by $131 million to replace
            lost stimulus funds. Passed the Senate, on hold in the House.
            SB  1215 – Follow up budget bill for many agencies, passed the House, pending vote in the Senate. Contains budget lines for Illinois State Board of
            Education including reductions in Mandated Categoricals.