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A pretty darned good school funding reform explainer

Tuesday, Jun 27, 2017

* Dusty Rhodes has written the best article on the school funding reform debate I’ve yet seen. Go read the whole thing

All districts receive state reimbursement for seven “categoricals” above what they receive in General State Aid. Since 1995, CPS has received its reimbursement in the form of a block grant. But as enrollment has declined and the block grant has not, CPS now receives about $250 million more from this block grant than it would if it had to submit vouchers for reimbursement. The Democrats, sticking to the “hold harmless” concept, would bake that $250 million into CPS’s base funding minimum. The Republicans would allow CPS to keep four categorical bonuses that add up to about $50 million; the remaining $202 million would be redistributed via the new funding formula.

Here’s how Barickman explained it at the Saturday hearing:

“When you make adjustments to the Base Funding Minimum for Chicago, and that’s the only place where adjustments are made, that eats up dollars first that cannot then go through the formula,” he said. “And for all of us who purport to say we want to fix the formula and create something with equity, the way in which we do that is by driving money through the formula.”

As a result of these conflicting interpretations of “hold harmless,” the two school funding bills run very different amounts of funding through the new formula. The Democrats’ most recent model assumes a $350 million appropriation (despite their own appropriation bill setting aside only $288 million). The Republicans’ model uses $672 million through the new formula, which results in much larger dollar amounts promised to each district. That $672 million includes fiscal year 2017 appropriation plus the $288 million proposed by Democrats, along with the $202 million taken from Chicago Public Schools’ block grant. (Despite conflicting testimony at Saturday’s hearing, this amount does not appear to include the “equity grant” that was given to districts with heavy concentrations of low-income kids). […]

Both the Chicago pension fund and TRS have massive unfunded liability. In the upcoming fiscal year, the state’s TRS payments will increase from $4 billion to $4.6 billion. Jessica Handy, with the statewide advocacy organization Stand For Children, testified Saturday that CPS’s statutorily required pension payment will be $721 million. The Democrats’ plan would provide a partial accommodation to CPS by adding a $500 million credit to its “local capacity target.”

What’s a local capacity target? In simple terms, both bills (Democrat and Republican) use a model built on interactive parts, like a mobile you’d see hanging over a baby’s crib. When one part is pulled down, the opposite side goes up. The State Board would calculate for each district an “adequacy target” (the amount needed to fund schools) and a “local capacity target” (the amount the district can be expected to generate using local property taxes). The state would supply funding to bridge the gap in between.

Ralph Martire, with the Center for Tax and Budget Accountability, helped write the Democrats’ plan, and on Saturday, he tried to explain that it handles CPS legacy pension costs less like a gift and more like a tax credit.

“The way we decided to deal with that in SB 1 was to acknowledge they can’t spend the same tax dollar twice,” Martire said. “So if they have to devote their local capacity to covering these unfunded liability costs, that local capacity is also not available to help fund schools.”

Another major point of contention on Saturday was whether the hold-harmless should be done on a per-district basis or a per-pupil basis. The Democrats’ plan uses district funding; Republicans, in an effort to compromise, use district funding for the first few years and then switch to per-pupil. That switch could result in decreased funding for districts that have lost enrollment. Rep. Christian Mitchell, a Democrat from Chicago, did a little research on how that might play out, and found that the majority of schools that have lost enrollment are in Republican-held districts.

Again, go read the whole thing. They pay attention to clicks over there, so help her out.

- Posted by Rich Miller        

  1. - Anonymous - Tuesday, Jun 27, 17 @ 9:37 am:

    I wish Dusty would do more reporting on the Rauners- she is a badger.

  2. - Responsa - Tuesday, Jun 27, 17 @ 9:44 am:

    From Dusty’s excellent article:
    ==“This bill, that you’re all fighting for, actually screws your side of the aisle harder than it screws ours,” he said. “So understand that the message being sent by the senator, by the secretary, by the governor, is that they are absolutely willing, that they are more interested in screwing poor children in Chicago than making sure your districts get the funding they deserve. That’s the message being sent right now.”==

    Rep. Mitchell’s stated interpretation of the bill and of “the message” is not helpful to resolution. Effective persuasion is rare when the word “screw” is involved in the dialogue.

  3. - Commonsense in Illinois - Tuesday, Jun 27, 17 @ 9:48 am:

    As usual, Dusty is spot on in here analysis of SB 1. I also agree that Rep. Mitchell’s comments are counter-productive to the legislative process. If that’s the best we can get from a veteran member of the legislature, it doesn’t bode well for the statesmanship that will be needed in the coming days.

    Come on Representative, grow up.

  4. - winners and losers - Tuesday, Jun 27, 17 @ 9:48 am:

    ==there’s no way to predict what the educational climate might be in Illinois in 2021==

    Good conclusion to her story.

    ==These spreadsheets — from both sides — are just snapshots of a promise==

    ==The windfall promised by the Republican plan made for some uncomfortable moments for school superintendents who testified before the House on Saturday==

    ==But Purvis, who ran the commission…==

    We need more stories, in more depth, to really have people understand SB 1.
    (1) Which of the 27 elements in SB 1 are really evidence based?
    (2) WHY do school districts have to do NONE of the 27?
    (3) Given (1) and (2), why should we believe that SB 1 will improve schools?

  5. - Telly - Tuesday, Jun 27, 17 @ 9:50 am:

    Dusty’s coverage of this issue has been head-and-shoulders above everyone else. She has sat through hours of meetings and hearings.

    Interesting how her notes from one of those hearings caught Barickman twisting the truth about including pension funding in the bill. Ouch.

  6. - Responsa - Tuesday, Jun 27, 17 @ 9:53 am:

    I wish Dusty was more available and widely read across the state instead of the opinionated half baked political reporters and opinion writers the majority of voters have access to. This article was presented in an informed way that showed the merits and pitfalls of arguments on both sides of the aisle as they might impact the entire state over time rather than just a constituency slice.

  7. - illini97 - Tuesday, Jun 27, 17 @ 9:54 am:

    A big thank you to Dusty for the article and Rich for the link. Spot on, this is the most succinct writeup I’ve seen of the differences in the two bills/approaches.

    Thank you.

  8. - City Zen - Tuesday, Jun 27, 17 @ 9:57 am:

    ==it handles CPS legacy pension costs less like a gift and more like a tax credit.==

    I thoughts tax credits were gifts.

  9. - Anonymous - Tuesday, Jun 27, 17 @ 10:11 am:

    Really nice article, but I didn’t see how the dueling property tax freezes might affect what happens. I might have missed it… I’ll go back and read again.

  10. - DuPage - Tuesday, Jun 27, 17 @ 10:23 am:

    It appears “local capacity target” is tied in with the local school tax rate and the lower residential property assessments in Cook county. It seems this would cause (collar county) districts that hold referendums and raise their own school tax rates to then lose some of their state funding.

  11. - Curl of the Burl - Tuesday, Jun 27, 17 @ 10:33 am:

    I really, really wish that both sides would come together on some sort of a “conference committee” like we see at the federal level. Not the Governor’s task force but an appointed group from the four leaders. You essentially have two competing proposals: SB 1 and SB 1124/HB 4069. Hash things out that way. It would likely (or at least hopefully) be more productive than the task force.

  12. - JS Mill - Tuesday, Jun 27, 17 @ 1:38 pm:

    =(2) WHY do school districts have to do NONE of the 27?=

    This is on of my two big beefs with your continuing commentary.

    You know for a fact that there are numerous regulations, both state and federal, that require schools to offer certain services like transportation and special education.

    FERPA, IDEA and other state regs all require them along side EXTENSIVE case law at the USSC level. The penalties for failing to meet those requirements are stiff.

    None of that goes away, and none of it is impacted negatively by SB 1 or the EBM.

    In reading the text of SB 1, you are correct, it funds 1 licensed SPED teacher for every 141 regular ed students. For our district of 1250 kids that is about 9 special ed teachers. Or one for every 15 special education students. We have 136 student in the district with IEP’s, the bulk of those are students with learning disabilities that spend 100% of their day in the regular ed class room with supports.

    Here is the thing, current reimbursement is only a fraction of the cost of what a special ed teacher costs. If they fully fund 9 that amount is equivalent to what we would receive for 27 teachers.

    SB1 also has targets for support staff (teachers aides) that exceed what we get now.

    All things considered, this plan would nearly double our special education funding from the state.

    So, while it is fair to disagree with the level of funding and how it was developed, stating repeatedly that it doesn’t require you to do anything with the money, while technically accurate (BTW- the current formula does not either) those “requirements” have always been found in other rules and regulations and that has not changed. This model finally sets targets and rational for the funds given that can/will/should be used for accountability (balanced accountability model).

  13. - winners and losers - Tuesday, Jun 27, 17 @ 4:05 pm:

    ==doesn’t require you to do anything with the money, while technically accurate==

    Yes, finally you say it is accurate, even if you say technically accurate.

    ==(BTW- the current formula does not either)==

    NO. For the current Special Education Personnel Reimbursement, the current formula REQUIRES you to hire special ed teachers, or other specialized personnel working with students with disabilities, or you receive ZERO money from it.

  14. - winners and losers - Tuesday, Jun 27, 17 @ 5:34 pm:

    On 1 for 141 GENERAL ed students to fund special ed:
    (1) Why fund special education based on the number of GENERAL education students?
    (2) This is funding for ALL of your special ed expenses, NOT just for teachers but for everything included in Section 14-1.08 (this is how SB 1 defines special education).

  15. - Red-winged blackbird - Wednesday, Jun 28, 17 @ 1:26 pm:

    Dusty deserves an award for her coverage of school funding this spring. She’s captured every twist and turn. Not sure where we’d be without her definitive reporting, especially with the pseudo-news sites that have spread around the state.

Sorry, comments for this post are now closed.

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