Governor's school-funding reform plan is fatally flawed

Illinois' school funding system consistently ranks as one of the most inequitable and least adequate in America. In virtually every national study on the subject, Illinois gets a failing grade. Condemnation of Illinois' education funding system is so pervasive that for the past three decades, prominent Democrats and Republicans have repeatedly pushed to reform it - all to no avail.

That is, until Senate Bill 1 - the "Evidence-Based Funding for Student Success Act" - passed the General Assembly on May 31. SB1 ties education funding to those evidence-based practices the research shows enhance academic performance. In other words, it invests taxpayer money into funding what actually helps students achieve.

SB1 accomplishes this by identifying a funding target that's unique for each school district - called its "Adequacy Target" - sufficient to cover the cost of implementing the aforesaid evidence-based practices, to the level required to meet the demographically driven needs of the students attending that district. The greater the student need, the greater the Adequacy Target.

Today, K-12 funding in Illinois is over $6 billion less statewide than what the evidence indicates is needed. Recognizing the fiscal challenges facing state government, SB1 phases in the new state funding required to reach adequacy over a 10-year period, which has the side benefit of allowing school districts to plan strategically for how best to apply enhanced funding to meet student needs. To counter the inequity of Illinois' current education funding system, the significant majority of increased state funding under SB1 goes first to those districts that are furthest from their Adequacy Targets. Hence by design, SB1 creates a school funding system that is adequate in amount, equitable in distribution, and even comports with every major recommendation made by Gov. Bruce Rauner's Commission on School Funding.

Nonetheless, the governor refused to sign SB1 into law. Instead, he issued an amendatory veto of the bill, which he claimed created a "fairer funding system."

Nothing could be further from the truth. Far from creating a fairer system, the amendatory veto modifies SB1 in a manner that makes it impossible for most school districts to ever reach their "Adequacy Target" of funding - which, remember, is based on what the evidence indicates they need to educate the children they serve. Here's why:

For starters, the amendatory veto eliminates the adjustment for inflation contained in SB1, effectively freezing all education costs (salaries, supplies, etc.) at 2017 levels. Which makes no sense, given the 10-year legislative time frame for funding adequacy. Under the amendatory veto, the "adequacy" funding districts receive in 2027 will be based on 2017 costs. Obviously, that won't come close to covering actual classroom expenses because in the real world, inflation drives costs up over a decade.

But wait, there's more. Under SB1, a school district's local funding contribution is adjusted to account for both: the Property Tax Limitation Law, which caps how much districts can levy; and local property wealth a school can't access because it's contained in a Tax Increment Finance district. This simply recognizes districts can't spend money on education they can't raise.

The amendatory veto, however, eliminates the adjustments for both PTELL and TIF contained in SB1. This artificially inflates local resources available to over 536 school districts statewide, by pretending they have resources they legally cannot access. The amendatory veto then reduces the new state funding that will go to these districts - below what the evidence indicates they need - because it assumes they have money they can't get. Yeah, that sounds fair.

The bottom line: The amendatory veto is fatally flawed. It creates an education funding system that will be inadequate in amount, inequitable in distribution, and not actually tied to the evidence of what works - which happen to be the same flaws that exist under Illinois' current formula.

SB1 on the other hand would actually create an equitable funding system, that identifies the real investment needed to educate all children to succeed academically.

Ralph Martire, rmartire@ctbaonline.org, is executive director of the Center for Tax and Budget Accountability, a bipartisan fiscal policy think tank.