The Senate passed Senate Bill 16 in late May, and it is currently pending in the House. If enacted into law, SB16 will dramatically change the way in which the State allocates approximately $6.7 billion to school districts throughout the State.
SB16 provides formulas to calculate a school district’s theoretical Available Local Resources (ALR) and to calculate a theoretical expense budget for the district. If a school district’s theoretical ALR exceeds its theoretical expenses, it receives no primary State aid under the formula. If the theoretical expenses exceed the theoretical ALR, then the school district receives the difference as primary State aid. Losses in State aid are capped at $1,000 per student.
The formula used to calculate a school district’s expenses is thus important. It is a key factor in determining whether a school district receives primary state aid, and if so, how much.
SB16 contains a per-student “foundation level” of funding in the amount of $5,154 as a starting point, and it then adds on amounts for low-income students, low-income concentration, special education, English-language learners and other factors.
The low-income concentration formula is a major driver of the expenses, and is responsible for about $1.7 billion, or 26%, of primary state aid. Under the formula, the higher the percentage of low-income students in a district, the higher the amount of funding allocated to that district. For a district with 90% low-income students, the allocation is about $4,300 per low-income student. A school district with a low-income concentration of 40%, however, would receive about $1,855 per low-income student.
The Definition of “Low-Income” and the Low-Income Concentration Formula Should Be More Nuanced
One key issue is the definition of “low-income,” which has changed over the years to become more expansive. “These formula changes caused nearly all of Chicago’s and Rockford’s student populations to be considered low-income,” according to a report prepared by the Education Funding Advisory Board for the Illinois General Assembly in January 2011. In 2000, 44 percent of students in Chicago public schools were considered low-income; that percentage jumped to nearly 90 percent when the definition was changed.
This suggests that politics is involved in defining “low-income,” rather than sound educational policy.
In SB16, the definition of “low-income pupil” is a pupil from a household with an income level of at or below 185% of the poverty guidelines set by federal regulations. This includes students who qualify for free and reduced-fee lunch under federal guidelines. The table below shows the current income levels for poverty, 130% of poverty (the free-lunch benchmark) and 185% of poverty (reduced-fee lunch) for the family size indicated.
There is a growing recognition that the degree of poverty matters. Yet, SB16 does not distinguish among or give different weights to students based on where their families fall along the income scale – which runs from extreme poverty to a working class income.
Paul Tough in his book “How Children Succeed” makes the point that the free and reduced-fee criteria encompass about 40% of the students in the U.S., “including some who are growing up in families that most of us would define as working-class or even middle-class.” He goes on to state the obvious: Children growing up in a family earning less than $11,000 a year are “confronted with countless obstacles to school success that children in families earning $41,000 a year likely are not.”
Nonetheless, SB16 rests on an assumption that a student from a household earning $11,000 a year has the same needs as a student from a household earning $41,000 a year. This is an unfounded assumption and is poor policy.
The problem is magnified because the formula fails to take into account that cost-of-living differences impact poverty. Using relocationessentials.com, a person living in Vermilion County on $40,731 would need to earn $50,000 to live in Cook County to maintain the same standard of living. A household needs almost 20% more to live in Cook County than in downstate Vermilion County.
Any sound definition of poverty should take into account regional differences in the cost of housing and other necessities. This is now recognized as good policy and best practice.
If we were talking about distributing a small amount of money, maybe we could overlook this. But SB16 is distributing $1.7 billion, or 26% of total State aid, pursuant to this arbitrary formula. The formula is flawed because it fails to take into account depth of poverty and differences in cost of living.
Eliminating the Poverty Grant
SB16 is flawed and inequitable in how it deals with low-income students for a second, wholly different reason: It cuts out all State aid for students from low-income households if they reside in school districts that have property with high equalized assessed values (EAV).
Under current State law, the State provides a supplemental grant for low-income students under a low-income concentration formula (the “poverty grant”), and this is without regard to the value of property in a school district. Under current law, the funding follows the low-income students, recognizing that they have needs and that they will benefit from additional resources. SB16, if enacted, would eliminate the poverty grant.
Districts 65 and 202 serve a high proportion of students from low-income families, the vast majority of whom are from households at the low-end of the income scale
For example, more than 5% of District 65’s students are considered homeless; 33% of its students are from households whose income is below 130% of the poverty line; another 5% of its students are from households whose income is between 130% and 185% of the poverty line.
Moreover, the cost of living in Evanston is much higher than in most other areas of the State, and the impacts of poverty are thus magnified for low-income households living here.
Our low-income students need additional supports to prepare them for college and careers and to help them grow socially and emotionally. And despite the theoretical model contained in SB16 – which has many flaws – Districts 65 and 202, in reality, need the funding they have been receiving from the State so they can continue to provide a high-quality education to low-income students, who make up 40% of their student bodies.
If SB16 becomes law, District 65 is projected to lose $6.5 million per year in State funding, and District 202 to lose $2.3 million per year. While these cuts would be phased in over four years, we think they may force the districts on a combined basis to cut staffing levels by more than 100 persons. Our students will suffer.
In addition to the reasons spelled out in our prior two editorials, SB16 is flawed because its definition of poverty fails to take into account degrees of poverty and cost of living differences. Moreover, it is flawed because it eliminates the poverty grant and cuts off primary State aid to school districts such as Districts 65 and 202, that have relatively high property values, even though they have high concentrations of low-income students who need additional supports.
If you are concerned about the impact SB 16 will have on Districts 65 and 202, we urge you to contact Senators Daniel Biss and Heather Steans and Representatives Robyn Gabel, Laura Fine and Kelly Cassidy, each of whom represents a portions of Evanston, and express your views.