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Local lawmakers eye pension cost shift

In proposing a balanced state budget Wednesday, Gov. Bruce Rauner proposed shifting teacher pension costs to local school districts.

In the past, this idea has sparked concerns schools would have to raise property taxes to make ends meet.

In interviews Wednesday, Rep. Jerry Long, R-Streator, and Sen. Sue Rezin, R-Morris, both said they would examine the cost shift proposal before deciding whether to support it.

Rezin, whose district includes La Salle County, said she would listen to superintendents, whom she said are open to the idea as long as the shift is phased in.

"We don't want to bring an additional burden to property taxpayers," she said.

She noted the governor proposed giving schools $350 million more in the next fiscal year, which she said could help offset the increased pension costs.

As it is, local school boards decide on teachers' salaries, which affect pension costs over the long run. But the state picks up the employer portion of the pension bill. Often, school districts, including ones in La Salle County, increase teachers' salaries by 6 percent annually for their last four years as a way to increase their pensions.

"If you separate the payment from accountability, there is no accountability," the Republican governor said in his budget address to the Legislature. "Our budget proposal shifts costs closer to home, so people can question expenses and deal with them more directly. When they are responsible for paying the bill, there will be plenty of incentive to lower costs."

Rauner's proposal calls for phasing in the pension cost shift by 25 percent annually over four years. He would do the same for universities' pension and health costs. In all, he said, the savings would be nearly $700 million in the first year.

Rezin said she liked the concept.

"Most people agree with the policy that the cost should lie at the feet of the people making the decisions," she said.

Last year, Rauner proposed a budget last year that included a $4.6 billion deficit listed as "Working together on 'grand bargain.' "

Long said the governor proposed a balanced budget this year, because he had "taken a hit" for a two-year budget impasse that ended with an income tax increase overriding Rauner's veto.

"Everyone has been saying for years that we need to change the way the state spends money and this proposal does just that," said State Sen. Jason Barickman, R-Bloomington, in a press statement, whose district includes Livingston County. "But make no mistake, however we move forward on a budget, there will be some very tough decisions to be made."

In his address, Rauner proposed a billion-dollar tax cut for the next fiscal year.

Both Long and Rezin said the state needs such reforms to keep businesses and people from leaving the state.

"As we've seen with tax reform nationally, it can spur economic growth. Businesses have their money parked in other places ready to do business," Long said.

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