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

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 legislators 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 10th 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. That’s because the state is shifting funding for early childhood education this year from ISBE to the new Department of Early Childhood.

The budget also nearly triples funding, to $26 million, to help pay for 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 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, and 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 below 60% of adequacy.

This year, the ninth year of the formula, all districts are now funded above 60% of adequacy, but there are still 48 districts below 70% of adequacy, and 532 districts — 63% of the total — below 90%.

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

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, or $20.4 billion.

Under the new formula, 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.

“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.”

A state 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.

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.