School Funding in Illinois An Overview

February, 2016

DRAFT 02/09/2015

Illinois has some of the largest income-based achievement gaps in the country

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Source: NAEP 2015.

Low-income students are less than half as likely to read at grade level at the end of 4th grade as their wealthier peers, and are less than half as likely to perform math at grade level in 8th grade.

Percent of students performing at grade level

20% 18%

55% 47%

4th Grade Reading 8th Grade Math

Low-Income Not-Low-Income

Research shows at-risk students have greater needs that require additional resources

• Low-income students have greater social, emotional, and physical needs than do other students

• Addressing these needs requires additional resources and services to ensure students’ success

• But in Illinois, these students are actually funded less than other students because of our reliance on local property taxes

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But within Illinois, our highest-poverty schools receive $2,500 less per student than our lowest-poverty schools

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Note: This includes state and local funding. Source: Ed Trust (https://edtrust.org/graphs/?sname=Illinois), Washington, DC, 2015.

$10,874

$13,415

Highest PovertySchools

Lowest PovertySchools

Spending per student 2012

Compared to other states, Illinois has the most inequitable funding system in the country

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NOTE: Low-income students are defined as those quo qualify for free or reduced-priced lunch. Source: Funding Gaps, Education Trust, 2015

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IL spends $0.81 on low-

income students

Ohio spends $1.22 on low-income

students

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Illinois is also near the bottom nationwide for its share of state funding

Illinois is the 4th Worst

Source: United States Census Bureau. Public Education Finances: 2013. June, 2015.

As a result, Illinois’s districts rely more heavily on property taxes than other states

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Because our state contribution is limited, Illinois schools rely on property taxes.

62% Property Taxes

State funding

Source: United States Census Bureau. Public Education Finances: 2013. June, 2015.

50%

50% 38%

National Average Illinois

Current funding system is a web of complicated formulas that do not drive dollars where they are most needed

• Formulas that take into account a local school district’s ability to pay for its local schools do not take into account student needs

• Formulas that take into account student needs do not take into account a local district’s ability to pay

• More than half of state education dollars go to districts regardless of their wealth, shortchanging poor students who have greater needs

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We need a funding formula that targets dollars where they are most needed

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Key principles should underlie a new funding formula

Illinois needs a comprehensive funding fix that:

1. Gets resources to districts based on their students’ needs;

2. Uses a single, straightforward model (that ends special deals);

3. Consistently takes into account school districts’ ability to support local schools with local funds when allocating state dollars;

4. Funds all districts in the same way, which includes pension parity for Chicago, the only school district in Illinois that does not receive state funding for pensions.

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New funding formula allocates state funding by assigning weights for various student needs

Base Funding Level Base level funding for an Illinois student

+ Student Needs Additional weights based on student characteristics (above base amount)

Poverty 25 percent to 75 percent per student based upon concentration of poverty

Special Education (Students who need exceptional levels of service will be funded separately)

100 percent

English Language Learning 20 percent

K-8 Gifted and Talented 1 percent

High School Outcomes: AP, Dual-credit courses

2 percent

High School Outcomes: Career Pathways Completers

3 percent

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Current system Integrated formula

GSA formula

Categorical

Supplemental grant

Chicago block

Source: ISBE 2014 Budget Book, ISBE FY13 State Disbursements

A weighted formula means Illinois could combine all GSA and most categoricals and allocate resources according to a single, transparent, integrated formula

Integrated formula

Categorical

This formula simplifies how state dollars are distributed

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Chicago block

Source: ISBE 2014 Budget Book, ISBE FY13 State Disbursements

Step 1: Determine district’s need

Integrated formula

Categorical

New funding formula considers districts’ needs and local resources when allocating state funds

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# Students x Weight = Need

Base 1000 x $5000 = $5,000,000

+ Low-Income 500 x $2000 = $1,000,000

+ Special Ed. 150 x $5000 = $750,000

+ English Learners 100 x $1000 = $100,000

+ Gifted and Talented 35 x $50 = $1,750

+ AP, Dual Credit 80 x $100 = $8,000

+ Career Pathways 40 x $150 = $6,000

Total Need $6,865,750

Step 2: Determine district’s local resources

Step 3: Determine state allocation by subtracting district’s local resources from total need

$6, 6,865,750 - $3,950,000 = $2,915,750

Property Wealth x Assumed Tax Rate + CPPRT = Local Resources

$125,000,000 x 3.0% + $200,000 = $3,950,000

As a result, the new funding formula targets dollars where they are most needed

BARRINGTON CUSD 220

KANELAND CUSD 302

DANVILLE CCSD118

Low Income Students 17% 17% 85%

Spending per student $14,017 $11,563 $11,331

Tax Rate as percent of Average 84% 124% 101%

Change under Weighted Formula -$614 $0 +$548

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CPS is brought in-line with the rest of the state

• New, integrated funding formula supports all districts and replaces Chicago Block Grants

• CPS gets pension parity State pays current pension benefit costs (“normal cost”), but not legacy

costs State funding is guaranteed through a “continuing appropriation,” so

pension funding is paid even if there is no budget, just like pension funding for the rest of the districts

CPS payment is capped for FY 17 and FY 18 at about $200M, providing budgetary relief for two years

• Ends the TRS federal funds surcharge for districts outside of Chicago When districts use federal funds to pay teachers, their pension

contribution rate is 36%, but only 0.58% if they use state or local funds This bill ends that inequity and disincentive to hire teachers to serve low

income students

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The time is now to fix this broken system

• Are we doing enough as a state to make sure every student has access to the resources needed to be successful and supported?

• Would we settle on investing only $6,000 in our own child, while other districts invest $30,000 in their children?

• If the answers are no, then we must demand equity in school funding for every child in Illinois

• The time is now to fix this broken system

• We shouldn’t ask another generation of children to wait for the great education they deserve

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