Evidence-based funding can’t overcome state’s structural deficit

Back in 2017, Illinois politicians worked together on a bipartisan basis to replace the state’s former school funding formula, which was consistently derided as the least- equitable in the country, with the “Evidence-Based Funding for Student Success Act” or “EBF.” The EBF ties school funding to covering the cost of educational practices which have been proven to enhance student achievement on every key metric used to evaluate the efficacy of a school system, from test scores to graduation rates. Investing taxpayer dollars into paying for what works academically is really sound policy.

When it passed, the EBF called for Illinois to fund it fully within 10 years — i.e. this year.

That won’t happen. In fact, the Illinois State Board of Education recently announced that the gap between what the evidence indicates is needed and actual K-12 funding levels will get worse, jumping from $3.32 billion last year to $4.38 billion this year. So a decade after the EBF passed, most Illinois school districts still don’t have the resources needed to fund educational practices the research shows work.

That’s problematic, because the economic importance of educational attainment continues to grow. Consider that in 1979, full-time workers with a bachelor’s degree earned 38% more on average than workers with a high school diploma. By 2024, that wage differential jumped to 84%. Moreover, communities with a greater number of college-educated folks have lower crime rates, better overall health, and higher wages for all workers, not just those with postsecondary degrees.

The Cleveland Federal Reserve even found that states with the best high school and college graduation rates also have the highest personal incomes. Meanwhile a Georgetown University study projected that by 2031, 72% of jobs will require some post-secondary credential.

Which means the K-12 education students receive has to be good enough for them to develop the numeracy and literacy skills needed to graduate and gain a post-high school credential. Shortchanging public schools equates to shortchanging the ability of the students who attend them to make it in the modern economy.

Who are the kids being shortchanged? Well in Illinois, fully 1,005,576 public school students, 56% of total statewide enrollment, are low-income, the vast majority of whom have been denied opportunity throughout their young lives. A quality K-12 education, however, would arm them with the academic skills needed to pursue higher education, and become qualified for good, high-paying jobs.

ISBE cited numerous factors that have driven the school funding gap growth, including everything from declining local revenues, to a more accurate count of low-income students. But the gorilla in the room remains Illinois’ consistent failure to adequately fund K-12 from state-based revenue. In fact, the state only covers 27% of all education funding costs, well below the national average of 46%. Meanwhile local property taxes cover 62% of all K-12 costs in Illinois, while the national average is 42%. This not only makes Illinois an outlier, but also drives up property taxes, while inequitably tying educational quality to the property wealth of a child’s community.

So why doesn’t Illinois invest more state revenue in education? The answer is clear: the state consistently runs a structural deficit in its General Fund. That means every year revenue growth isn’t sufficient to keep funding the same level of services provided in the prior year, after adjusting for inflation. Eliminating this structural deficit so Illinois could adequately fund education requires a tax increase of around $6 billion. And yes, Illinois can afford that tax increase. Illinois’ state GDP is over $1.2 trillion. Which means a $6 billion tax increase represents just 0.5% of state GDP — an insignificant cost when weighed against the benefits it would generate.

• Ralph Martire, rmartire@ctbaonline.org, is Executive Director of the Center for Tax and Budget Accountability, a fiscal policy think tank, and the Arthur Rubloff Professor of Public Policy at Roosevelt University.