The Illinois House voted yesterday to override Governor Rauner’s veto of the budget bill, income tax increase, and the budget implementation bill. The House vote came on the heels of the Illinois Senate’s override vote on Tuesday, July 4th. With the House vote of 74-37 on the budget and 71-42 on the tax increase and budget implementation bills, all three pieces of legislation have now become law, bringing to an end an over two-year impasse on the state budget.

The budget provides for over $36 billion in spending on K-12 education, state colleges and universities, social services, medical care for the poor, and other governmental services. The revenue from the tax increase will result in over $5 billion in new funds to help pay for these expenditures and to decrease the amount of unpaid state bills. The budget plan also calls for approximately $2 billion in cuts.

While the budget bill appropriates an increase in money for K-12 education, the language of the bill requires that general state aid funds be distributed using a new “evidence-based” funding formula. SB1, a bill providing for a new evidenced-based funding formula, was passed by the Illinois General Assembly but is being held in the Senate on a procedural matter and has not been signed into law. Governor Rauner has threatened to veto SB 1 over concerns about the funding it provides to the Chicago Public Schools. Accordingly, there is currently no legislative mechanism to distribute the majority of the education funds contained within the newly passed state budget. If Governor Rauner vetoes SB1, the next steps to ensure that school districts receive these state funds are unclear. A Republican-sponsored evidence-based funding formula bill (SB 1124, Barickman) is pending in the General Assembly, but it has yet to pass either chamber. While passing the budget was essential to school district funding, the next few weeks will be critical as we wait to see what Governor Rauner does with SB1 and whether the General Assembly is forced to either attempt to override another veto or come back together to compromise on a new funding formula bill.

Also of potentially significant impact on districts is the provision in the budget implementation (BIMP) bill that shifts the pension costs on the amount of any employee’s salary in excess of $180,000 (the amount of the Governor’s salary) from the state to the local district.