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Illinois governor to block Chicago schools' funding boost

CHICAGO (Reuters) - Illinois Governor Bruce Rauner said on Monday he intends to block money earmarked for Chicago Public Schools’ (CPS) teacher pensions under recent legislation because he feels it is too much of a “bailout” for a badly managed system.

The bill, which revamps Illinois’ school funding system, was passed in May by the Democratic-controlled General Assembly, which has yet to send it to the Republican governor for approval.

Rauner said he intends to use his veto to amend parts of the bill that address CPS pensions. That would result in a cut of nearly half of a $293 million funding boost for state aid and pensions CPS would receive in the legislation, freeing up $145 million for other school districts, according to funding data posted on Rauner’s website.

“The point of this school reform bill is to help low-income students across the state, including those in Chicago, get the education they deserve – not to bailout CPS’ mismanaged teacher pension system,” Rauner said in a statement.

Escalating pension payments have led to drained reserves, debt dependency and junk bond ratings for CPS, the nation’s third-largest public school system.

The bill establishes an evidence-based model that ties public school funding to “best practices” aimed at enhancing student achievement.

The $36 billion fiscal 2018 state budget the legislature enacted earlier this month over Rauner’s veto prohibits the flow of state money to schools in the absence of an evidence-based funding model. That has raised the possibility some school districts largely dependent on state funding may not be able to open for classes next month.

Rauner accused Democratic legislative leaders of holding on to the bill to force a crisis. John Patterson, spokesman for Senate President John Cullerton, said discussions on releasing the legislation were ongoing.

Meanwhile, CPS contended Rauner’s intended action on the bill would exceed the veto power afforded governors under the Illinois Constitution. That is because the amendatory veto as used by Rauner would substantially change the bill’s intent to make teacher pension funding more equitable. The governor’s office disputed that assertion.

Unlike all other Illinois public school districts, which participate in a state-subsidized teachers’ retirement system, CPS has its own pension fund, which receives minimal funding from the state.

“Governor Rauner’s stunt won’t pass legal muster, and instead jeopardizes the opening for dozens of school districts around the state,” CPS spokeswoman Emily Bittner said in a statement.

Reporting by Karen Pierog; Editing by Matthew Lewis