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Illinois funding law levels the playing field for students

Signed by the governor last week, the legislation changes the funding formula for each district, but also includes a controversial $75 million scholarship tax credit program for private school tuition.

Ashlee Rezin/Sun Times/AP
Surrounded by students and elected officials, Illinois Gov. Bruce Rauner signs education funding reform bill SB 1947 at Ebinger Elementary School in Chicago on Aug. 31.

The wish list of Chicago Ridge School District superintendent Kevin Russell includes the types of things other administrators likely desire for their schools as well: smaller class sizes, daily gym classes, more art and music for the elementary students.

Dr. Russell has reason to revisit his list now, thanks to a law signed by Illinois Gov. Bruce Rauner last week – a measure that will significantly change the way the state funds its schools starting in 2018. The current system, which relies primarily on local property taxes, will be replaced by a new formula that takes into account each district’s individual needs and local funding sources when distributing state aid, prioritizing high-poverty districts that need the most financial assistance. 

It’s a big step for a state that has lagged far behind the rest of the country in equitable funding, observers say, particularly as the change has come as the result of political compromise in the state’s legislative and executive branches after years of contentious debate. The final passage of the bill allows educators to start cautiously thinking about how they will help their students.

“We had such an inequitable funding system in districts like mine that are very heavily reliant on the state,” says Russell, whose district, southwest of Chicago, has 71 percent low-income students. “This really is a lifesaver for us and should give our kids the opportunities that a lot of other districts take for granted.”

Along with a new evidence-based model – which involves a formula that prioritizes high-poverty districts without reducing state funding for other districts – the legislation includes a new $75 million scholarship tax credit program for private school tuition and a provision allowing districts the option to vote to lower their property taxes. 

The reforms, particularly the new formula, are “an exceptionally big deal in Illinois,” says Christine Kiracofe, professor of educational administration at Northern Illinois University in DeKalb. ”I think it has the potential ... to really drastically change the landscape of school funding in the state.” 

Hurdles to catching up

Concerns about inequity in school funding aren’t new, or unique to Illinois. The 1960s through the ‘90s saw a wave of states assume greater responsibility for school funding, largely in response to court challenges, says David Arsen, professor of education policy at Michigan State University. 

Since then, he says, the trend has “slowed dramatically.” In recent years, there’s been “a very checkered, unequal progression on school funding equity across the states,” with reforms occurring “in a kind of sputtering fashion.” 

While some other states have been able to enact change through judicial action, however, Illinois has not. Lawsuits have failed, with courts ruling that there is no case to be made on the basis of the Illinois constitution – leaving the fate of school funding in the hands of politically divided legislative bodies. 

“It’s harder in Illinois than in many states because ... it’s been something that’s had to organically come from the political leadership,” says Lawrence Picus, professor of school finance and education policy at the University of Southern California’s Rossier School of Education. “There’s not a hammer saying ‘you have to do this’ coming from the courts.”

Addressing a long-standing issue

A 2015 analysis by The Education Trust found that Illinois had “by far” the largest gap in funding between poor and wealthy schools in the nation, with the report stating that “the legislature does not distribute state funds progressively enough to counteract disparities in local dollars.” 

These disparities are due in large part to Illinois’s heavy reliance on local property taxes to fund public schools, a system that has resulted in many poorer districts spending little more than the state’s longtime “foundation level” of $6,119 per student, while some wealthier districts spend as much as $30,000. Local property taxes accounted for about 67 percent of K-12 funding in Illinois in 2015, with the share provided by the state sitting at about 25 percent. Nationally, local sources account for 45 percent of revenue for elementary and secondary schools, with an average of 46 percent coming from the state, according to 2013-14 data.  

A compromise, but still some dissent

After years of debate, negotiations, and setbacks – including a veto of the original legislation by Governor Rauner, who characterized the bill as a bailout of Chicago Public Schools (CPS) – lawmakers were able to reach a compromise appealing to lawmakers on both sides of the aisle. 

Not everyone embraced the deal. Some Democrats who voted against the package did so in opposition to the tax credit program, while their Republican “no”-voting counterparts cited the cost of the bill and additional money directed at CPS. 

The $75 million tax credit provision in the law – praised recently by United States Secretary of Education Betsy DeVos for its potential to “help thousands of Illinois children succeed” –  was strongly opposed by teachers unions in the state, who argued that the program would take tax dollars away from public schools. 

“We’re on a better path toward equity and adequacy, and we must move forward in our classrooms and communities,” said Illinois Federation of Teachers President Daniel Montgomery in a statement. However, he wrote, those gains had come “at a very disappointing cost.” 

Still, the passage and signing of the measure reflects a shared determination worth recognizing, Professor Picus says.

“Anytime you get large-enough majorities to reach agreement on matters of this sort in the legislature, it’s a pretty amazing thing,” he says. “It suggests a great deal of political will and how important it is to adequately fund schools for the children of Illinois.” 

Cautious optimism

The reforms have been applauded by some of the state’s administrators in majority low-income districts, including Superintendent Ehren Jarrett of Rockford Public Schools. With 58 percent of Rockford students coming from low-income families, Rockford spent $12,141 on operational costs and $7,145 in instructional costs per student in 2015. 

SB 1947 “[has] the potential to significantly impact all students,” said Dr. Jarrett in a statement to the Monitor. “Illinois is now moving toward a commitment to both adequacy and equity for students in Rockford and the rest of the state.” 

Russell, the Chicago Ridge School District superintendent, says he and his colleagues were “excited” to hear that the reforms had passed. CRSD spent $10,313 on operational spending and $6,681 on instructional spending per pupil in 2015, falling below the state averages of $12,821 and $7,712, respectively. 

Under the evidence-based funding model, CRSD hopes to tackle its wish list – reduce class sizes and expand its offerings in subjects such as art, music, and physical education, Russell says. As things stand now, the district can’t afford full-time art and music at the elementary level, and is unable to offer daily physical education classes. Russell is optimistic that the new funding system could change that. 

“Of course,” he adds, “we’re cautiously optimistic until we see all the final details.” 

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