Fact-check: Did Rauner alone delay school funding, cause property tax hikes?

There’s no question Illinois’ record two-year budget impasse took quite a toll.

State government between 2015 and 2017 ran up a backlog of more than $15 billion in IOUs to vendors as Gov. Bruce Rauner and Democrats who run the legislature squabbled over how to run the state.

That jeopardized social services ranging from domestic violence shelters to mental health care. Higher education also took a hit, as public universities and community colleges laid off thousands of employees and state tuition assistance for low-income students was thrown into limbo.

Yet a recent ad by J.B. Pritzker, the Democratic challenger to Gov. Bruce Rauner, assigns unilateral blame for the crisis to the Republican seeking re-election. It also highlights a different education-themed casualty of the budget standoff.

“Want to see what failure looks like?” a narrator asks in the 15-second spot. “Because of Bruce Rauner, Illinois went 736 days without a budget, delaying funding for schools while local governments were forced to raise property taxes. Four years of failure is enough.”

Throughout all the chaos and uncertainty of those days, Rauner and Democrats in the General Assembly managed to carve out a budgetary oasis for school funding. Multi-billion dollar appropriations for K-12 education became law even while lawmakers and the governor could agree on little else.

So what exactly is Pritzker getting at? We decided to check.

Supplemental grants vs. general aid

Pritzker campaign spokesman Jason Rubin pointed to delays that developed during the budget standoff in reimbursements to schools for so-called categorical programs such as special education and transportation.

“Bruce Rauner led Illinois to a 736-day budget crisis, jeopardizing school funding in its entirety and making the state late on critical categorical payments to schools,” Rubin wrote in an email. “Local governments across the state raised property taxes during this time while Rauner’s administration failed in one of its most fundamental obligations, to fund schools on time.”

It’s true that hundreds of millions of categorical grant dollars, which supplement general aid from the state, were paid to schools later than usual.

Data from the Illinois State Board of Education show categorical payment lagged up to nearly seven months in 2017 as the bill backlog ballooned, compared with three months or less in the years leading up to the impasse.

But neither Pritzker’s ad nor the article it cites mention categoricals, suggesting instead that state funding was delayed more broadly. That’s simply not the case.

General state aid, which has comprised more than 70 percent of state funding for schools in recent years, continued to be paid on time throughout the budget impasse.

By contrast, just 4 percent of Illinois districts relied on categorical grants for more than 10 percent of their funding in the year before the impasse began, state records shows.

Tax hikes not the first line of defense

Pritzker’s attempt to draw a connection between the budget impasse and property tax hikes is also questionable.

One key reason is the upside-down nature of school funding in Illinois. Few states contribute a smaller share of overall school dollars to local districts, rendering them highly dependent on local property tax revenues to make ends meet. So it has become almost routine for many local school boards to annually raise their property tax levies to the amount allowed by law.

Districts sometimes also hold referendums to ask voters for even more authority to raise property taxes. During the budget impasse, districts that went that route were more successful in getting the okay from voters than they had been for several years prior, according to results catalogued by the Illinois Association of School Administrators.

That said, the volume of ballot questions asking voters to raise school taxes was still far smaller during the budget impasse than it had been in previous decades, records show.

Ben Schwarm, deputy director of the Illinois Association of School Boards, said it was more common for districts to resort to tools other than property tax hikes to cope during the budget standoff with any cash flow problems caused by delays in categorial payments.

“It was much more prevalent for them to cut their budgets and lay off staff,” Schwarm said.

Local reports from the time show cash-strapped districts resorted to taking out higher lines of credit, selling bonds, cutting spending and drawing on reserves to cover costs as they waited while the state comptroller triaged payments to struggling social service agencies, state vendors and schools.

Finger-pointing

Finally, there’s the question of blame. There was partisan finger-pointing aplenty during the budget standoff, and Rauner clearly played a significant role. But he didn’t act alone. That’s why we rated a similar claim from Pritzker Mostly False in June.

The impasse dragged on because the governor and Democrats in the General Assembly held very different views on a variety of key issues ranging from the management of state finances to a so-called turnaround agenda Rauner said would lead to a more robust economy but critics saw as a thinly veiled attempt at union busting.

And while local school districts did face funding uncertainty in the absence of a full state budget, they were largely spared from the broader carnage of the impasse. The possibility that schools wouldn’t open their doors carried substantial political risk for Democrats and Republicans alike, so both sides acted to avoid it.

Our ruling

Pritzker’s ad says that “because of Bruce Rauner, Illinois went 736 days without a budget, delaying funding for schools while local governments were forced to raise property taxes.”

The budget impasse did cause state reimbursements for special education, transportation and several other programs to lag.

Yet the Democrat’s ad implies a far broader impact on school funding, ignoring that general state aid to fund day-to-day school operations was provided for even while a broad array of spending for other state programs was not.

As for property tax hikes, it’s likely that many school districts raised their levies as the broader budget impasse was ongoing. But that is routine in Illinois, a consequence of state policies that foist the lion’s share of responsibility for overall school funding on to local property tax payers.

What’s more, the ad blames Rauner alone for the budget impasse that caused the delay. But Rauner and Democratic lawmakers butted heads for two years over spending and policy priorities, meaning he hardly acted alone.

There are small elements of truth sprinkled through Pritzker’s ad, but he takes significant liberties in seeking to attach sole blame to Rauner for the budget impasse and then link that to school funding delays and property tax hikes. We rate it Mostly False.

The Better Government Association runs PolitiFact Illinois, the local arm of the nationally renowned, Pulitzer Prize-winning fact-checking enterprise that rates the truthfulness of statements made by governmental leaders and politicians. Ahead of the historic 2018 elections, BGA’s fact-checking service is teaming up weekly with the Sun-Times, in print and online. You can find all of the PolitiFact Illinois stories we’ve reported together here.

Sources

“Is Illinois on the Brink of a Financial Armageddon?” Governing, June 28, 2017

“Illinois facing dire consequences as budget feud continues,” The Associated Press, June 30, 2017

“Gov. Rauner moves to keep schools open during budget clash,” The Associated Press, June 24, 2015

Email and phone interview: Jason Rubin, spokesman for J.B. Pritzker, Sept. 18 and 25, 2018

“State funding for buses, lunches and special ed arrives late,” Chicago Tribune, Jan. 5, 2017

“School districts grapple with delayed categorical payments,” Star Courier, Jan. 10, 2017

Email interview: Jackie Matthews, spokeswoman for the Illinois State Board of Education, Sept. 20-26, 2018

Dataset: FY14-FY18 Mandated Categorical Comptroller Release History, Illinois State Board of Education

“Schools prepare for no state money, as budget impasse continues,” WSIL, Mar. 22, 2016

Dataset: FY14-FY18 Mandated Categoricals to Total District Revenue, Illinois State Board of Education

“Local taxpayers picking up a greater share of school district funding,” Chicago Tribune, Dec. 2, 2016

Illinois School Referenda Election Results, Illinois Association of School Administrators, accessed Sept. 27, 2018

School Tax Rate Election Results, Illinois Association of School Boards

Phone interview: Ben Schwarm, Illinois Association of School Boards deputy executive director, Sept. 24, 2018

“State budget impasse still hurting schools,” State Journal-Register, Feb. 18, 2017

“Did Rauner really pour $1 billion ‘down the drain’?” PolitiFact Illinois, June 25, 2018

Email and phone interview: Jamey Dunn, spokeswoman for Illinois Comptroller Susana Mendoza, Sept. 24-26, 2018

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