Illinois uses federal dollars meant for public school teachers to instead pay down pension debt, and one Illinois congressman plans to put a stop to that practice.
Illinois receives approximately $74 million in federal funds annually under Title I. The money is meant to go to schools, but the state has been using $59 million of that to pay down old pension debt in the Teachers Retirement System. It does it by assessing low-income school districts at a higher rate if they use the federal funds to pay teachers than if the school pays for the teachers out of its own budget.
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U.S. Rep. Bob Dold (R-IL) said Illinois stands alone in this habit.
His legislation would stop the higher assessments on the neediest schools in the state.
"If a district uses federal dollars to hire a teacher, Illinois takes up to 36 percent right off the top to pay past pension obligations,” he said.
Illinois schools pay 36.06 percent of Title I funds to TRS when they pay teachers using the Title I funds. The rate rises past 38.54 percent next school year.
A spokesman for TRS said the board voted in 2013 to lower the rate schools had to pay when they used federal funds for teacher pay. The General Assembly reversed the board's decision and removed its power to adjust the rates.
Illinois is required to pay $3.7 billion into the teacher’s pension fund in fiscal year 2016. It is the state’s largest pension obligation and underfunded by $65 billion. Chicago Public School teachers have their own pension system and do not contribute to TRS.