CHICAGO – Talks among Illinois legislative leaders resume Thursday in an attempt to resolve a political dispute about school funding formulas.

A resolution would allow general state aid to again begin flowing to the state’s more than 850 school districts. The meeting will pick up where leaders left off during an hours-long negotiating session on Tuesday ahead of what had been a scheduled session of the House on Wednesday.

House Speaker Michael Madigan, D-Chicago, was expected to attempt an override of Gov. Bruce Rauner’s amendatory veto of the original school funding overhaul legislation in Senate Bill 1 but it was expected to fail without some GOP support.

Late Tuesday, Madigan canceled the session “in light of progress” made during the Tuesday meeting.

Michael Madigan, speaker of the Illinois House of Representatives in Springfield, Illinois on Feb. 18, 2015.
Illinois House Speaker Michael Madigan cancelled a House session set for Wednesday during which Democrats planned to attempt an override of Gov. Rauner's amendatory veto of a school funding overhaul.

“I am hopeful we can finish our negotiations shortly to ensure schools around the state can receive the money needed to operate schools throughout this school year,” Madigan said in a statement. “If we don’t reach compromise later this week, the House will move to override the governor’s veto of SB 1 in session next week.”

It’s unclear whether a compromise can be brokered as acrimony runs deep between the General Assembly’s Democratic leadership and the Republican governor and GOP leaders with both sides jockeying to defend their positions as the 2018 election nears.

The budget package that took effect last month after some GOP members broke with Rauner to support it requires the adoption of a so-called evidence-based model – such as the one in SB1 -- to distribute about $6.7 billion in general aid.

Rauner used his amendatory veto powers to reshape the bill that he had labeled a bailout for Chicago Public Schools, leaving in limbo the distribution of $7 billion of aid that was to begin with an Aug. 10 payment. Rauner altered the bill shifting how tax-increment financing and future enrollment will count toward funding levels and cut CPS’ new aid levels.

The Senate overrode Rauner earlier this month but Democrats are a few votes short of the three-fifths majority of 71 for an override to succeed and few Republicans have so far showed a willingness to again break ranks although that could change if local political pressure builds. If the amendatory veto is not overridden by Aug. 29, the legislation dies.

In negotiations, Democrats are pushing to keep new funding levels for CPS intact while Republicans are pushing to include subsidies for families that choose private schools.

On Thursday, Chicago Mayor Rahm Emanuel and other mayors and village presidents voiced their support for SB1 in its original form and called on the legislature to override Rauner.

“It’s a very strong first step toward correcting the old formula that we have for school funding in Illinois that clearly is broken,” said Robert Nunamaker, Fox River Grove president and chairman of the Metropolitan Mayor’s Council.

Emanuel said SB1 ensures “equity, parity and stability” for districts across the state. Emanuel’s counterparts praised SB1’s hold harmless provisions and said they support the additional CPS aid given Chicago’s role as an economic engine for the region.

The state’s failure to make its first distribution of fiscal year 2018 poses a “credit negative for Illinois school districts” as it will test their financial well-being and weigh heavily on those with a material dependence on aid, Moody’s said recently in a special commentary.

Fitch Ratings previously issued a similar warning in a report early this month saying an extended impasse could put Chicago Board of Education and other Illinois school districts with limited financial flexibility “at risk.”

Chicago Public Schools, which has drained much of its reserves in recent years in order to stay afloat and since has turned to cash flow borrowing, is relying on $300 million in additional aid authorized in the original SB1.

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