CRYSTAL LAKE – Shifting the employer’s portion of teacher pension payments to public school districts is a move that will lower property taxes in McHenry County, Gov. Bruce Rauner said.
The Republican visited Crystal Lake on Friday morning to speak with the Northwest Herald Editorial Board. Rauner is trying to win a second gubernatorial term, and he spoke with the board for about 30 minutes, discussing property taxes in McHenry County, pensions and more.
“We’re not only shifting pension responsibilities to where the decisions are made on what the pension costs will be in terms of deciding who gets what salaries, when they retire, what their terms are,” Rauner said. “We need to align responsibility for decision-making with responsibility for paying. ... If we align the interests, there will be economic incentive to keep the pension costs reasonable.”
Rauner unveiled his plan to redirect pension costs to school districts Wednesday as part of his proposed budget for fiscal 2019, which begins July 1.
The pension shift would reverse a long-standing practice of the state paying local schools’ portion of pension costs. The one exception was Chicago Public Schools. The local Chicago school budget paid teacher pensions until an overhaul of education funding last summer.
Rauner would save $2 billion in state spending through the pension change and by taking health care costs out of the mix of benefits for which union employees can bargain in contract negotiations. But that must be approved by the General Assembly. The Democrats who control it likely won’t go along.
Rauner said other states, such as Maryland, already have adopted such pension measures.
“If you look at the states that have deep financial trouble and unfunded pensions and pension problems – the top 12 states that have the biggest problems – they all have the state pick up pension payments, even though the decisions and responsibility for who’s getting the pension and how they’re structured is done at the local level. There’s a disconnect,” Rauner said.
The governor shifted his focus to mention the importance of “local control” – a philosophy that also will lower property taxes.
“How do we bring down property taxes? Local control of bargaining,” Rauner said. “Local control of bidding and contracting, local control of consolidation, local control of shared services, local control of the property tax levy.”
• The Associated Press contributed to this report.