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Illinois Moves Towards Significant Shift in How Schools are Funded

About four months ago, I wrote about a proposal to overhaul how schools are funded in Illinois that seemed to resemble California's new Local Control Funding Formula. The basic elements of that plan, which came out of the state Senate education committee, were incorporated into Senate Bill 16 (called the School Funding Reform Act of 2014), which has passed the upper chamber of the state legislature and is now being considered in the House.

Here are the main elements of the bill, as described in an analysis for the Illinois State Board of Education:

• Create a single funding formula that provides simple, straight-forward and equitable means to distribute education funds to Illinois school districts.

• Prioritize resources where there is greater student need.

• Provide greater transparency about how funds are spent at the school level.

• Phase in the new funding formula over four years to allow districts to adjust to new spending levels.

The idea behind the "single funding formula" is to reduce and consolidate the number of funding streams coming from the state. The Senate committee's report that I wrote about in February said that having so many different and disparate sources of money for districts means school funding in Illinois lacks both clarity and predictability.

This push to simplify K-12 funding in the state leads into the second point—the new funding system would determine whether each student can be classified as an English-language learner, low-income, special education, or other designations, and assign additional funding for each such classification. Students could earn more than one such designation and therefore receive additional "weighted" funding from the state, although some are mutually exclusive.

In practice, this approach means less state aid for wealthier districts in Chicago suburbs and more for districts in the downstate area. The bill's main sponsor, Sen. Andy Manar (D), said that under his legislation, 92 cents of every state dollar spent on K-12 would be based on districts' financial need, instead of the current 44 cents for every $1 based on need. In the video below, Manar touches on the Chicago-versus-downstate dynamic when discussing the need for a new K-12 funding approach:

In addition, the new school-finance system would require districts, starting in the 2015-16 school year, to account for spending in a variety of areas at each school, such as salaries, special-education services, and instructional support services. (This is known as school-based accounting.) By contrast, the analysis notes, "The current system enables the public to see how much money is spent at the district level but not how funds are spent within the district."

As for Chicago? It's typically gotten a block grant from the state, but that grant would be absorbed into the new funding formula, the Journal Star newspaper reported in late May.

One thing that's missing from this new funding proposal: A direct boost in actual K-12 state aid. The state's Education Funding Advisory Board recommended that per-pupil spending be set at $8,767 in Illinois for fiscal 2015, but the state board calculated that this figure would require a $4.8 billion increase in school spending by the state—right now, Illinois allocates $6.7 billion in aid to districts. And in fact, although the state sets its base per-pupil funding level at $6,119, the state actually provides only a prorated amount of that level (89 percent) to districts. 

Voices for Illinois Children, an advocacy group, decried the fact that for a decade, per-pupil spending in Illinois has fallen below what the advisory board has recommended. It also argued that insufficient overall spending continues to hurt the very districts the new funding formula in Senate Bill 16 is designed to help: "Proration is most harmful to school districts that rely most on state funding—those with meager amounts of property wealth and large concentrations of low-income students."

The group characterizes the funding crisis in the chart below:

IllinoisFunding.PNG

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