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On July 31, the Illinois legislature sent Senate Bill 1 to Governor Bruce Rauner. If enacted, the bill would have changed the way in which the State funds education to what is called an “evidence-based funding model.” 

As promised, Gov. Rauner issued an amendatory veto on Aug. 1. The legislature now has three options: 1) It can accept his amendments by a 60% vote in both the Senate and the House; 2) It can override his veto by a 60% vote in both the Senate and the House; and 3) It can fail to act, in which case Senate Bill 1 bill dies. If the legislature intends to act, it must do so within 15 days of the date the amendatory veto is read in the legislature. 

While the issue is not totally clear, some claim that due to a provision in the legislation that approved the State’s budget on July 6, the State may not fund schools unless SB 1, or an evidence-based funding model, is passed. Any legislative action at this point requires a 60% vote.

Even though State funding for education is uncertain, both District 65 schools and Evanston Township High School are scheduled to open as planned.

“District 65 schools will open as scheduled on Monday, Aug. 28, and we look forward to welcoming our students and staff back for the first day,” Paul Goren, Superintendent for School District 65 told the RoundTable, “Yet, it remains critical that both parties reach an agreement as soon as possible. Like other districts, State funding is an important component of our budget. Without the passage of a new school funding formula, the consequences will have a significant impact on our fund balance and the referendum resources we have reserved to balance our budget in future years. We will continue to monitor this situation.

“As for the funding bill itself, we are cautiously optimistic about its proposed evidence-based formula. Previous versions would have diverted much needed resources from District 65 schools and the students who need it most. The funding bill, recently vetoed by the governor, contains a “hold harmless” provision that would maintain and build upon District 65’s current funding levels.

“We remain very concerned about two provisions that might be considered – a two-year property tax freeze and a pension shift to local school districts. If ultimately included, both provisions would have a devastating impact on our schools.”

Eric Witherspoon, Superintendent of School District 202, told the RoundTable, “ETHS will open on time and we are excited to have our students returning. We are looking forward to a very productive school year. The situation with the State funding is a worry. We have included State funding in our budget, and if this is not resolved we will face a shortfall. However, the current State funding formula places the responsibility for most of our funding on our local property taxpayers. That funding stream will keep us operating while the Illinois school funding crisis continues.

“I am very encouraged by the evidence-based funding formula that is designed to address inequities in school funding across our State. I am very disappointed that bill was vetoed. We have been trying for many years to address the school funding problems in Illinois. We do worry about future threats of a property tax freeze or a pension cost shift that would be a major problem for ETHS. We will continue working with the legislature to support good legislation that equalizes funding and also protects all districts from being penalized.”

The Proposed Education Funding Model

SB 1 is based on “Evidence-Based School Funding.” Under the proposed model, the Illinois State Board of Education (ISBE) would compute an “Adequacy Target” for each school district in the State. The Adequacy Target is theoretically the amount needed to properly educate every student. ISBE would also compute a “Local Resources Target” which theoretically is the amount school districts have available, through property taxes and Base Minimum Funding from the State, to fund education. It does not include federal funding. If a school district’s Local Resource Target is less than its Adequacy Target, it is eligible to receive a share of the increase in funding that the State allocates toward education.

In computing an Adequacy Target, the model takes into account 27 “essential elements.” For example, ISBE would determine how many core teachers are needed in each school district. For grades K-3, it assumes one core teacher is needed for every 15 low-income students in those grades, and one is needed for every 20 non-low income students. For grades 4-12, the model assumes one core teacher is needed for every 20 low-income students, and one for every 25 non-low-income students.

Under the model, ISBE would then determine the funding needed to pay for core teachers by multiplying the number of teachers needed by an average cost per teacher, which would be $60,930 for elementary and middle schools, and $69,484 for high schools. A regionalization factor of 1.05681 is then applied for school districts in the Chicagoland area, which purports to reflect regional cost differences. That would bring salary levels up to $64,391 for elementary and middle schools in the Chicago area, and up to $73,431 for high schools in the area.

According to ISBE’s website, the average teacher salary in 2016 for District 65 was $78,679, and for District 202 it was $97,854.

A similar process would be followed for 26 other essential elements, which include specialist teachers (e.g., art and music teachers), intervention teachers, guidance counselors, librarians, nurses, principals, assistant principals, and other positions. Amounts would also be allocated for professional development, computer technology, assessment, maintenance, student activities, additional investments in low-income and English language learners and special education.

Under SB1’s model, ISBE would also determine a Local Resource Target (LRT) for each district. The Local Resource Target is the dollar amount a school district would ideally contribute towards the Adequacy Target, based on a comparison of all districts in the State. If Districts collect more in property taxes than assumed in their Local Resource Target, the real receipts are adjusted downward. 

As a general proposition, under SB1, no school district would receive less than the amount of State funding “distributed” to it in the 2016-17 school year. This is called its Base Minimum Funding. Additional funding approved by the Legislature for education would go to the neediest districts, those that are furthest away from meeting their adequacy targets. For example, assuming there is $350 million in additional funding, 85% would go to districts with greater than 50% low-income students.

ISBE has calculated that District 65’s Adequacy Target is $92.3 million, and that its Local Capacity Target is $92.3 million. District 65’s Base Minimum Funding for FY’17 is stated at $7,604,643, and new money that would go to District 65 under SB 1 is $193,958. 

Under ISBE’s calculations, District 202’s Adequacy Target is $43.4 million, and its Local Capacity Target is $59.9 million. It has a Base Minimum Funding of $2.8 million, and under SB1 it would receive new money of $4,526.

It is unclear whether the two categorical payments owed to Districts 65 and 202 in the 2016-17 school year, but which were not paid, would be counted in calculating the Base Minimum Funding. For District 65, that could mean about $4 million per year.

The Amendatory Veto

Gov. Rauner’s amendatory veto of SB1 proposes to cut back on funding to the Chicago Public School system. It also proposes a number of other significant changes, including it would maintain Base-Minimum Funding on a per-district basis until the 2020-21 school year, and then shift to minimum funding on a per-student basis; it removes a minimum State funding level; and it eliminates the PTELL and TIF equalized assessed value (EAV) subsidies.

ISBE was scheduled to issue its calculations showing the impact of the Governor’s Amendatory Veto on each school district on Aug. 7. Due to some glitches in the data, ISBE had to redo its calculations. At the time this paper went to press, the calculations have not yet been made public.

On Aug. 9, Illinois Senate President John J. Cullerton said in a prepared statement that the Illinois Senate will return to session on Sunday, Aug. 13  to take action on education funding.