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Illinois governor vetoes bill to aid Chicago school pensions
December 1, 2016 / 6:35 PM / a year ago

Illinois governor vetoes bill to aid Chicago school pensions

CHICAGO, Dec 1 (Reuters) - Illinois Governor Bruce Rauner vetoed on Thursday a bill to give the Chicago Public School (CPS) a one-time $215 million state payment to help cover the district’s escalating pension costs.

The Republican governor said Democrats reneged on a June deal that tied the bill’s enactment to the legislature’s passage of comprehensive pension reform, which has yet to gain any traction in the fall legislative session scheduled to end on Thursday.

Cash-strapped CPS included the money in its $5.46 billion fiscal 2017 operating budget.

The nation’s third-largest public school system is struggling with pension payments that will jump to about $720 million this fiscal year from $676 million in fiscal 2016, as well as drained reserves and debt dependency.

Following a meeting earlier on Thursday with Rauner and other legislative leaders, Democratic Senate President John Cullerton told reporters there was no definitive agreement tied to the bill. He also said his chamber would attempt to override a veto of the bill.

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

Illinois is limping through its second straight year without a complete budget. It also lacks a plan to curb a huge $130 billion unfunded pension liability in the wake of an Illinois Supreme Court ruling that found the state constitution prohibits pension benefit cuts for public sector workers.

“Despite my repeated request for daily negotiations and hope to reach a comprehensive agreement by the end of next week, we are no closer to ending the impasse or enacting pension reform,” Rauner said.

A stopgap budget approved in June expires at the end of this month.

Early on Thursday, Rauner used a Facebook post to denounce Democratic House Speaker Michael Madigan for pushing for another stopgap budget that would not include reforms long-sought by the governor.

“I informed the speaker that the only way that I could possibly accept another stopgap spending plan is if we include two powerful bipartisan reforms with it - term limits and a permanent property tax freeze,” Rauner said.

Madigan, who has resisted the inclusion of the governor’s reforms in a budget deal, later told reporters the idea of a stopgap budget originated with the Rauner Administration.

“I‘m suggesting a budget,” he said. (Reporting by Karen Pierog; editing by Diane Craft)

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