Education Funding Part I: A Crumbling Foundation

“The State has the primary responsibility for financing the system of public education.”
Constitution of Illinois, Article X, Section 1

americans4innovation

americans4innovation

This post is the first in a series where I’ll discuss what I think needs to be done about education funding in Illinois. Before I could make any sensible recommendation, I had to first figure out what’s being done now. To put it bluntly, it turns out that the way we fund education in this state is best described by a compound word that begins with the word “cluster”. These next several posts are the diary of my journey toward illumination.

In Illinois, General State Aid (GSA) is the primary state grant, providing unrestricted grants-in-aid to Illinois school districts in what is supposed to be an equitable manner. GSA represents 66 percent of all state general funds expenditures on PreK‐12 education in Illinois and consists of two funding streams.

The primary funding stream is the equalization Formula Grant, which considers local wealth in determining the amount of the grant awarded per pupil.

The second funding stream is for at‐risk students and is referred to in statute as the Supplemental Low‐Income (it’s politically incorrect to call it “Poverty”) Grant. This second grant provides additional funding for low‐income pupils in an amount that rises as the proportion of the student population qualified as low‐income increases, but does not means test against local wealth in the way the equalization Formula Grant does. (Think: Chicago, and you’ll pretty much understand what I’m talking about.)

The equalization Formula Grant considers local wealth as an indicator of need for state resources. Funding amounts vary inversely with local wealth. Grants decline as local wealth increases and grants increase as local wealth decreases. (Well, Duh)

At its most basic, the formula pays the difference between a Foundation Level set in statute and a district’s local resources per pupil. So a district that possesses $2,000 in local wealth per pupil would receive the difference between the Foundation Level and its local wealth, or $4,119 per pupil through the formula grant.

There are three categories of payment in the equalization Formula Grant:

  • Foundation Wealth: Local resources < 93% of the Foundation Level (i.e. East St. Louis, Kankakee, etc.)
    Calculation: (Foundation Level – Local Wealth per Pupil) x #Students
  • Alternate Method Wealth: Local resources 93% or greater and less than 175% of Foundation Level (i.e. Pretty much everybody outside the Collar Counties whose economies haven’t totally collapsed.)
    Calculation: 5% ‐ 7% of Foundation Level x #Students
  • Flat Grant Wealth: Local Resources Greater Than or Equal to 175% of Foundation Level (i.e. Those undeservedly rich Collar Counties that pay the highest real estate taxes in the nation and should be grateful for the privilege.)
    Calculation: $218 x #Students

In 1997 the state board of education created the Education Funding Advisory Board (EFAB), the purpose of which was to establish an objective level of per-pupil funding that would be adequate to provide a minimally acceptable education. In 2002 it set a foundation level of $4,560, which the state funded. Since that year, however, Illinois has failed to fund the annual board-established foundation levels. In 2012, EFAB set the minimally acceptable funding level at $8,360 per pupil (and has increased its recommendation for 2016 to $8,899), but state funding supported a foundation of only $6,119 per pupil. (Why should pensions be the only thing the State won’t take responsibility for?)

For fiscal year 2013, the state reduced general state aid by $519 million, or 11 percent of the preceding year’s total, about $259 per pupil statewide.

But here’s the kicker: Instead of reducing state aid to schools on a per-pupil basis or on some progressive basis that cut funding for poor schools less than it cut support for better-funded ones, the state board of education decided to cut each school district by the same 11 percent. In 2012 Illinois allocated, on average about $3,391 for each of its two million public school students. But few receive the average. For example, in 2010–11 Kankakee School District 111 received $4,875 per pupil in general state aid, while New Trier High received only $218 per pupil in general state aid. Even with all the state aid it received, Kankakee expended only about $11,663 per pupil while New Trier, with its high property wealth, spent $20,807 per pupil, largely derived from property taxes. Yet because 2012 funding was reduced by the same 11 percent from each district’s previous year’s level of General State Aid, Kankakee saw a reduction of about $536 per pupil and New Trier had a cut of only about $24 per pupil. (2 EFAB members walk into a bar…never to return.)

If you’re still awake, the bottom line is this: Illinois has one of the greatest disparities in per-pupil funding between low-property-wealth districts and those with high property wealth in the nation. Illinois has the second-highest disparity in the nation between property-poor and property-wealthy districts, and during the 2009–10 academic year, the wealthiest elementary districts in Illinois spent about $24,000 per pupil while the poorest districts spent about $6,000.

Understanding this Rube Goldberg mess of a funding formula is merely the first step in solving the puzzle of why our kids can’t read, taxpayers are being forced out of their homes because of high property taxes, and why we need to look outside of our own state for answers.

NEXT: The poverty grant and why there’s a great sucking sound coming from the shores of Lake Michigan.

I’d like to acknowledge the sources for much of what appears above:

  1. “Fixing Illinois: Politics and Policy in the Prairie State” by James D. Nowlan and J. Thomas Johnson (University of Illinois Press, May, 2014)
  2. “Report of the Education Funding Advisory Board”, Illinois State Board of Education (January, 2015)
This entry was posted in Education, Property Taxes and tagged , , . Bookmark the permalink.

3 Responses to Education Funding Part I: A Crumbling Foundation

  1. Pingback: Education Funding, Part II: The Big Sucking Sound from the Shores of Lake Michigan | Illinoyances

  2. Pingback: Education Part V: Property Taxes, the Well Has Gone Dry | Illinoyances

  3. Pingback: Let’s Not Throw Out the Baby with the Bath Water, at Least Not Yet | Illinoyances

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