Schools to get funding increase, but less than some had urged

SPRINGFIELD – Illinois lawmakers passed a budget Monday morning that includes a full $350 million increase in Evidence-Based Funding for public schools, money earmarked specifically for the neediest school districts in the state.

That includes a restoration of the $47 million for property tax relief grants called for in the formula that lawmakers passed in 2017 — a program that lawmakers paused in this year’s budget and that Gov. JB Pritzker had recommended not funding again in the upcoming fiscal year.

But that is still far less than what many education advocates had urged lawmakers to pass. Those groups, which included teachers’ unions from some of the state’s poorest districts, noted that as the state enters its 10^th year of funding under the EBF model, most school districts in Illinois are still significantly underfunded.

“Today’s budget proposal reflects not enough compliance with the state’s own evidence-based formula, not enough revenue for schools and services, and not enough courage from the governor and lawmakers at a time when it is needed more than ever,” Stacy Davis Gates, president of the Illinois Federation of Teachers and Chicago Teachers Union, said in a statement.

Overall, the budget calls for just over $10.8 billion in state funding for the Illinois State Board of Education, which oversees the state’s public school system. That’s about $120 million more than Pritzker requested in his budget proposal, but slightly less than the agency had requested.

It’s also about $332 million less than the agency received last year. But that’s because the state is shifting funding for early childhood education this year from ISBE to the new Department of Early Childhood.

In addition to the increase in EBF money, the budget includes increases in certain categories of transportation costs and other kinds of “mandated categorical” spending. It also nearly triples funding, to $26 million, to help fund free breakfast and lunch programs.

Underfunding

The Evidence-Based Funding system was signed into law in 2017 by then-Gov. Bruce Rauner, a Republican. It was intended to address the vast disparities in funding levels across more than 860 school districts in the state.

Under the formula, each district is assigned an “adequacy target,” based on its size, demographic factors and regional cost-of-living factors. It also considers how much local revenue each district is capable of generating to produce an estimate of how much state aid it needs to meet its adequacy target.

Under the law, the state is supposed to add at least $300 million in new funding each year. All districts continued receiving at least as much state aid as they did before the formula was adopted, but the bulk of the new money was earmarked for districts furthest from their adequacy target.

In the system’s first year, 657 of the state’s 851 elementary, high school and unit districts were funded at less than 90% of their adequacy target, including 167 that were below 60% of adequacy.

This year, the ninth year of the formula, total EBF dollars in the budget — including the base funding districts were getting before the new formula took effect — stands at $8.9 billion. All districts are now funded above 60% of adequacy, but there are still 48 districts below 70% of adequacy, and 532 districts, or 63% of the total, are below 90%.

ISBE estimates that bringing all districts up to the goal of at least 90% of adequacy would cost an additional $3 billion.

Sen. Graciela Guzmán, D-Chicago, introduced legislation this year that would have required the state to fully fund the formula to bring all districts above the 90% adequacy mark.

In a recent interview, Guzmán said that at the current pace of adding just $300 million in new money each year, factoring in inflation, it will take at least another decade to reach the goal of bringing all districts up to or near adequacy.

“We’re already seeing the impact of inadequacy in school districts all across our state,” she said. “We’ve heard a lot of robust testimony from school districts that are talking to us about the kinds of staff decisions that it means. It means fewer counselors, larger class sizes, less bilingual support, less special ed support, less reliable transportation. That’s happening. And then at the same time we see more pressure than ever on teachers, on our students, on parents, on families, on local taxpayers.”

Property tax relief

Another element of the 2017 funding reform was to address some of the inequity in local property tax rates around the state.

At the time the EBF formula was passed, according to ISBE data, the state paid only about 26.6% of the total cost of public schools. Local revenue, primarily from property taxes, accounted for 66.4% of the total cost, or $20.4 billion.

Under the new formula, in addition to $300 million in new funding for the neediest schools, the state is supposed to provide approximately $50 million for property tax relief grants, which can be distributed to districts with particularly high tax rates.

Districts that received the grants had to agree to use the money to lower their total property tax levy for at least two years. After that, the grant amount became part of the district’s funding base going forward.

Last year, however, Pritzker called for pausing the property tax relief program amid questions about whether the program was doing any good. Meanwhile, ISBE was tasked with conducting a review of the program to measure its impact.

“We’ve got to figure out, how do we do that better, and I don’t think we have the answer quite yet,” Pritzker said during a March 5 news conference. “But it didn’t seem appropriate for us to just throw the money into the program without having a better potential outcome.”

The state’s report found that from 2015 through 2023, tax rates in districts that received the grants did go down. But rates also declined over that period for most districts that did not receive the grants, a trend the report said could be explained by rising property values.

Further, it found total property tax revenue collected in districts receiving the grants grew, but at a slower pace than in districts that did not receive the grants.

“What I think the report says is that it’s helped some districts, hasn’t been as beneficial elsewhere,” Sen. Michael Halpin, D-Rock Island, who chairs the Senate’s education budget committee, said in an interview. “But I think it’s worthwhile, given the current issues with affordability, to maybe put those back in for this year. But I’m regularly pushing for additional money to go into the formula.”

Under the new budget, districts receiving the grants in the upcoming fiscal year will be required to use them to lower their property tax levies for three years instead of two.

Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.