School districts face budget
uncertainty unless lawmakers act
by Charles N. Wheeler III

The last "G'day, mate" has echoed away from the Sydney Olympics. Fans of the White Sox and the Cardinals are looking forward to playoff baseball, perhaps even a World Series matchup. (Cub fans, as usual, are looking forward to next year.)

Illinois voters are paying closer attention to the November election, now just a few weeks away, and legislative candidates are talking about what they'd do to address concerns from abortion rights to zoning laws.

Meanwhile, away from the bright lights, a small group of committed citizens is laboring to lay the groundwork for lawmakers to tackle one of the most important challenges they will face when the 92nd General Assembly takes office in January: determining what constitutes an appropriate funding level for the state's public schools.

The impetus lies in a 1997 law that created a new general state aid formula, the complex calculation under which most state assistance is funneled to local school districts. The act set foundation levels for the next three years, ending at $4,425 per student in state and local resources for the current school year.

The new law also guaranteed for the first time that the money would be there to meet the new foundation levels by creating a continuing appropriation for formula funding. That budgeting device essentially requires the comptroller to write checks to local school districts for the amount of aid they're entitled to under the formula, even if lawmakers haven't appropriated enough money in a particular year to cover all the claims. Thus, for the last three years, school officials have had a much better idea of available funding, rather than having to wait for lawmakers to decide how much money to allocate for education.

But both the annual increases in foundation levels and the statutory guarantee the funds will be provided are due to end June 30. Thus, school districts again will face pre-1997 budget uncertainty unless the legislature acts.

Enter the Education Funding Advisory Board. Created by the 1997 law, the board's job is to recommend changes to the formula, including new levels for both the basic foundation grant and for an extra per-pupil poverty grant for districts with significant concentrations of low-income students. The panel's first report is to be filed with lawmakers on January 1, with updates every two years after that. The task is not as simple as telling the legislature to boost the foundation level by another $100 a year in each of the next two school years. Instead, board members must grapple with some of the underlying school funding concerns that prompted the 1997 formula revisions.

Consider a couple that state schools Superintendent Glenn W. McGee outlined for the panel as it began work:
• Adequacy. The 1997 law says the foundation level represents "the minimum level of per-pupil financial support that should be available to provide for the basic education of each pupil in average daily attendance." In reality, there is no one-size-fits-all number. The bare-bones cost of providing a basic education is not the same for a third-grader as it is for a high school junior. Nor will a dollar buy as much "education" in the Chicago suburbs as in southern Illinois.

McGee suggested the panel consider three different foundation levels: one for pre-kindergarten to third grade, another for fourth to eighth grade and a third for high school. Including early childhood education in the formula, the superintendent noted, would help local school officials make long-range plans for pre-kindergarten programs, rather than having to wait each year to see how much lawmakers appropriated for the programs.

Moreover, if the goal of the exercise is to assure that every public school student is afforded a basic education, the panel also should recommend adjusting each grade-based foundation level to reflect the cost of living in a particular area.
• Poverty. Recognizing that children from low-income homes need extra help to do well in school, the 1997 law

www.uis.edu/~ilissues Illinois Issues October 2000 . 47

provided supplemental state aid, in the form of poverty grants, to school districts with significant numbers of poor children. This year, the grants range from $800 to $2,050 for each low-income student, based on the concentration of poor children in the district. But a district with fewer than 20 percent of its students from low-income families receives no additional help, meaning a small district could lose tens of thousands of dollars in poverty grants if a middle-income family moved to town and put the kids in school.

A lower eligibility bar, as McGee proposed, would assist districts now on the 20 percent bubble. To completely preclude all-or-nothing scenarios, though, the panel might consider a sliding scale in which additional funding is available for every low-income student, with the per-pupil amount increasing as the concentration of poor children increases.

A more vexing question is how to measure the number of poor children in a district. Under the 1997 law, the number of low-income families is drawn from the most recent federal census, meaning that eligibility for poverty grants — and the amount going to local schools — is based on 10-year-old census data. Alternative ways to get a more current count have been suggested over the years — kids receiving free school lunches, for example, or whose families are on food stamps — without policy-makers agreeing on a new yardstick. Now the panel has to tackle the issue as part of its look at poverty grants.

Whatever figures the panel chooses, one critical element will be locking in the new levels through a continuing appropriation.

At the root of most school funding problems, of course, is Illinois’ heavy reliance on local property taxes to pay for education. Until more of the bill is picked up by other funding sources, we’ll have to continue to struggle to assure an adequate education for every child.

Charles N. Wheeler III is director of the Public Affairs Reporting program at the University of Illinois at Springfield.

46 . October 2000 Illinois Issues www.uis.edu/~ilissues