Fixing school funding

Illinois’ antiquated school aid formula doesn’t work

SCHOOLS | Lauren P. Duncan

Illinois has seen the price of food, gasoline, shelter and most basic necessities increase. Yet for four years the state hasn’t increased the amount it pays per child in public school. And the formula which determines how much state aid each school gets hasn’t been changed since 1997.

A few members of the General Assembly are trying to take steps to change the state’s antiquated school-funding system. In July, 2013, Sen. Andy Manar, D-Bunker Hill, a freshman lawmaker who had just taken office in January, was named as a co-chair of the Education Funding Advisory Committee (EFAC). Illinois Senate leaders formed the committee to address the state’s education funding disparities, including the fact that, at the time the committee was formed, about 67 percent of Illinois school districts reported deficit spending.

After the committee gathered testimony, on April 1 Manar introduced Amendment 1 to Senate Bill 16, or the Illinois School Funding Reform Act of 2014. It would set

up a formula to distribute education funding based on a local district’s “ability to pay,” which considers a district’s available local resources through property tax revenues. The formula also considers the poverty level of districts by factoring in low-income student populations. The bill aims to give property-poor districts a bigger slice of the state aid pie, and propertyrich districts a smaller piece of the pie. The proposal would also add greater weight to other special funding needs districts face, such as students with disabilities or gifted learners.

Presently, about 44 percent of the $4.3 billion in general state aid for education is distributed to districts based on their ability to pay. Manar’s bill aims to raise that number to about 92 percent so that most of the state’s funds would be distributed based on districts’ needs.

Manar said the proposal is a needed change toward reforming Illinois’ education funding.

“We need a comprehensive fix that deals with good policy and ignores the politics,” Manar said.

Illinois’ school funding formula is complex.

Entire college courses are taught on the funding system. Manar’s bill aims to change the method. The key point, Manar said, is to help address today’s education funding issues.

The state’s education funding problems mean some schools have had to close buildings, hold classes in windowless rooms and use outdated textbooks, Manar said at a press conference April 2 when he unveiled the bill. He said small towns are losing their identity, good teachers are losing their jobs and the achievement gap is rising in poverty-stricken districts.

“Those things are all a direct result of a law that today protects inequity.... We can do better in this state and this bill will get us there,” Manar said.

The problem

Illinois places a greater burden on local school

districts to fund education than most states. Article V of the Illinois Constitution says “the State has the primary responsibility for

financing the system of public education.” Yet the state government hasn’t taken that primary responsibility seriously.

The average state and local share of education cost in the United States is about 44 percent state share, and 44 percent local share, with the remaining cost paid with other grants or federal dollars, according to a report released April 7 by the Center for Tax and Budget Accountability (CTBA). In Illinois, the state carries about 28 percent of the bill, while local districts pay for 61 percent of the costs through property taxes.

The CTBA report states that over-relying on local property taxes to fund education is not good tax policy. Instead, CTBA emphasized that state-based revenue generated from income and sales taxes is a better way to tax people. “Illinois over-relies on property taxes because the state fails to pay its fair share of the cost of public education,” the report states.

Manar’s bill doesn’t change the sources of education funds in Illinois, though. It suggests the state move one step closer toward distributing funds based on districts’ needs with the revenues the state has.

Since 2010, Illinois has not increased the “foundation level,” which is the amount the state has decided is needed to provide an adequate education to children. The state share has remained at $6,119 per child. However, many schools do not receive even that much, due to “proration,” or state budget cuts. Yet the state’s Education Funding Advisory Board has recommended that the foundation level be higher. In 2014, it said, the minimum needed to adequately educate an Illinois student is $8,672.

What the state pays to educate students may increase if Gov. Quinn’s plan to increase education funding by $344 million next school year goes through. However, agreement on a number of looming issues – including extension of the temporary income tax and proposals for a progressive, or “fair tax,” structure – stand between the governor’s proposed budget and the fund increases becoming a reality.

Manar’s bill aims to ensure that regardless of how much money the state provides, the districts that need the money most will receive the most.

The bill would reduce state aid to school districts that have more local income and increase aid to districts that have lower local property tax income, by taking into consideration local property wealth.

There is a vast difference in property values amongst Illinois’ school districts. Because districts receive most of their dollars from local property tax revenues, this means propertyrich districts have the opportunity to collect more money for schools. Wealthier districts tend to have lower tax rates than poorer districts. For example, New Trier Township High School District 203, which includes the suburban towns of Winnetka and Northfield, has more than 10 times the local property wealth of Springfield, yet Springfield’s tax rate is more than three times higher. New Trier, however, is one of the state’s 72 “flat grant”

districts, which means because its resources are so great, it receives a bare minimum of state funds, $218 per student. Manar’s bill aims to decrease even the $218.

Even some of the wealthiest districts understand there needs to be a change in the funding system, Manar said.

“There’s a realization that something has to change in our state system,” he said. “If the state system crumbles, everybody is going to be affected. Even the most wealthy … whether you spend $20,000 per student or $6,000 per student, the health of the state’s system is at stake here, and that’s what we’re trying to talk about,” he said.

Manar wants to make sure property-poor districts can afford to educate their lowincome and special needs students. In addition to basing funding on a district’s “ability to pay,” the proposed reform considers the number of low-income students in the district. Low-income students are those who are eligible to receive free or reduced-price school lunches.

The proposed reform would also add extra weight to the funding formula for other students with greater needs, such as advanced placement students, alternative schools, gifted pupils, students with disabilities, and Englishlanguage learners.

Ralph Martire, CTBA executive director, said Manar’s bill is one step toward improving the tax policy in Illinois.

“If adequately funded, this bill would do a much better job of distributing resources and it follows best practices. In those countries and/or states that do a much better job of funding education, they figure out what it takes to educate your typical kid, and then they say, all right, not everybody is your typical kid, some have special needs, some come from poverty, some are English-language learners. All of those things cost more, to educate a kid with those backgrounds, than to educate a kid who doesn’t,” Martire said. “This approach to education factors in those characteristics that increase the cost of educating children.”

The proposed reform also suggests adding extra weight to gifted students.

“For the longest time we sort of ignored the fact that it’s more expensive to provide an education to a really gifted kid than to a typical kid,” Martire said. “This really changes that.”

Gaining support

While Manar and the legislation’s cosponsors are working to gain support for the proposed reform, many school superintendents are worried about something more immediate. School leaders are simply hoping they don’t receive any further cuts to their budgets this year.

Springfield District 186 is facing a more than $4 million shortfall for the next fiscal year beginning July 1. That’s if state funding is kept at the same level as last year. While more equity-based funding would likely help the district, which has about a 60 percent low-income student population, right now its leaders worry about how much the district will receive.

District 186 Interim Superintendent Robert Hill pointed out that if state education funding levels are kept at the same rate, then changing the formula would take away funds from some districts, though probably not Springfield.

“When you have the conversation that we’re having right now and you don’t put any more money in, then it’s guaranteed, it’s a zero-sum game, there are winners and there are losers,” he said.

Based on the legislation, Hill said, it looks like Springfield would be a winner.

Though the debate seems to pit poor downstate schools against wealthier suburban districts, Hill pointed out that there are some suburban districts that are hurting just as much as downstate schools.

Thus, the actual projections showing how districts would be financially affected are what superintendents are waiting to see. Manar said the Illinois State Board of Education is expected to release the calculations in mid-May.

For PORTA District 202 in Petersburg, the outcome of Senate Bill 16 isn’t certain. Superintendent Matt Brue said that when he began as superintendent 10 years ago, the district had about 18 percent low-income students, but now it’s close to more than 30 percent, due to a growing federal housing development.

The district has higher property values than some nearby districts, but it’s facing budget shortfalls because the district’s student population has been declining.

In addition to waiting on the bill’s numbers, Brue and his district are waiting to see how much the state approves this year for education spending. Over recent years, the district has had to cut back on its spending. Instead of cutting staff to save money, Brue said, the district has trimmed expenses by not filling positions when staff members retire. As a result, Brue both serves as the district superintendent and the cafeteria director. He said the district can’t afford any deeper cuts in state spending.

In order for Manar’s proposal to pass, Brue said, wealthier districts that stand to lose general state aid may ask for “mandate relief.” The state legislature passes laws, or mandates, every year that serve as requirements for districts. For example, a bill pending in the Illinois Senate would require schools to implement screening tests for children entering kindergarten to look for signs of dyslexia. If a student shows signs of dyslexia, the bill would require schools to offer a special program. At PORTA, however, Brue said the district already has more than 30 specialized programs for children with reading disabilities that ensure students are receiving the attention they need.

Both Superintendent Hill of Springfield District 186 and Superintendent Brue of PORTA said most leaders in Illinois would agree that school districts do not need a long list of mandates in order to know what students need.

“Parents have expectations,” Brue said.

“There’s a reason we haven’t cut programs … I guarantee you that if school districts have mandate relief, they’re not going to stop providing a good education.”

Brue said he thinks Manar’s plan is a good idea, and that most of the property-wealthy districts would accept losing some of their general state aid, especially if mandate relief is available.

Like school superintendents, legislators also are waiting to see the numbers behind school formula reform.

Convincing the state’s leaders to agree on major policy changes is rarely a simple task. Superintendent Hill said even 20 years ago, education funding reform discussions were often based on something called “printout politics.”

“They would print out what the impact was going to be on every school district. Every member of the General Assembly would get the printouts, look at the schools that were in their legislative district … and it would pretty much determine whether they would vote for or against it,” Hill said.

Manar is hoping that isn’t the case this time around. EFAC went through seven public hearings and 45 hours of public testimony before releasing its findings this year. Manar said all of that work wasn’t done for a “bickering match.”

“Because if that was the case, I just wasted a lot of time and a lot of people’s time.”

A number of groups have voiced their support for the bill, including Advance Illinois, a group that works on education policy, the Chicago Urban League, Ounce of Prevention Fund, a group that works with children in poverty, the Illinois State Board of Education, the Illinois Education Association, Stand for Children, Illinois Action for Children, and the Illinois Business Roundtable. Additionally, former Gov. Jim Edgar and Lt. Gov. Sheila Simon support the measure.

Yet others have voiced concerns or opposition. In both the Senate Executive committee and Senate Executive subcommittee, both of which approved the bill, Republican members who were present either voted “nay” or “present,” while all Democrat committee members voted in favor of the bill.

Sen. Dale Righter, R-Mattoon, voted against the legislation in committee. He said the proposal will increase the funding system’s disparities and more funds will go to Chicago public schools. A component of the bill is to eliminate the Chicago Block Grant and filter funds for Chicago District 299 through the same formula as all other Illinois school districts.

Sen. Righter also criticized the legislation as being drafted “in secret” without discussion with EFAC’s Republican co-chair, Sen. Dave Luechtefeld, R-Okawville.

Manar said he had hoped politics would be kept out of the discussion. Manar was displeased to hear that Sen. Righter had called in to a radio station in Manar’s district and disparaged the bill.

“Actions like that, by Senator Righter, are the reason we haven’t been able to get this done in the state,” he said.

Manar’s plan would phase in changes over four years. In the meantime, districts are hoping to see no further cuts this upcoming school year. Over the past two years, Illinois schools have been “prorated” at 89 percent, meaning schools received 89 percent of the funds that the state says are needed to provide the foundation level, or $6,119 per student. Superintendent Hill said some leaders have heard an 83 percent proration has been considered.

“It would be a doomsday scenario,” Hill said.

Contact Lauren P. Duncan at [email protected].