Governor Bruce Rauner slashed state aid for Chicago’s cash-strapped school district on Tuesday, issuing an partial veto of a bill that overhauls Illinois’s education funding practices.
Rauner, a Republican, had repeatedly called the measure a Chicago “pension bailout” since the Democrat-led legislature approved the law to provide more than $200 million to help the district pay mounting retirement fund bills. His veto cuts a block grant for Chicago schools and nixes pension considerations from the evidence-based funding formula, according to a statement from Rauner’s office.
Illinois’s bond spreads have tightened since the state enacted a spending plan last month, ending its record-long budget impasse that spanned two years. The gap between yields on Illinois’s 30-year bonds and benchmark debt fell to the lowest since October last week after Moody’s Investors Service confirmed the state’s bond rating, ending the imminent threat to Illinois’s investment grade status.
But that tightening may be