illinois school funding reform | sb 1

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SENATE BILL 1 SCHOOL FUNDING REFORM ACT OF 2015 February 24, 2015

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Page 1: Illinois School Funding Reform | SB 1

SENATE BILL 1SCHOOL FUNDING REFORM ACT OF 2015

February 24, 2015

Page 2: Illinois School Funding Reform | SB 1

SB 16 Background & Senate ActionDate Action

July 2013 Illinois Senate unanimously voted to

create an Education Funding Advisory

Committee with the recognition that

how Illinois funds public education

was ripe for review

February 2014 Bipartisan Committee released its

recommendations for a new state

education funding system

April 1, 2014 SB 16 filed in its entirety, building on

this groundwork

May 27, 2014 Passed Senate: 32 Yeas, 19 Nays, 6

Present

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Page 3: Illinois School Funding Reform | SB 1

“How” vs. “How Much”EFAC focused on the premise that regardless of how much or how little is

available for schools in any given State fiscal year, how it is spent should matter.

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Page 4: Illinois School Funding Reform | SB 1

The Task we Face in Illinois

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• “Due to the impact of district wealth, districts that make lower

tax effort tend to raise higher amounts of local revenue.”

• “We conclude that the Illinois school finance system is

inequitable for both students and taxpayers.”

• “Our concern is that the parameters that drive the allocation of

state formula support . . Have little meaning beyond assuring

that total state aid does not exceed the revenue that the state

is willing to provide for school districts.”

Testimony from Augenblick, Palaich & Associates to the Education Funding Advisory

Committee (EFAC) | September 17, 2013

Page 5: Illinois School Funding Reform | SB 1

What did Augenblick say to EFAC?

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East St. Louis D 189 Arlington Heights D

214

Tax Rate 7.49 1.84

PPS from Local Funds $1,200 $18,400

Low Income % 99% 26%

Proration Cut @ 89% -$935 -$58

Page 6: Illinois School Funding Reform | SB 1

80

60

40

20

0

100

Current

system

% of state funding

Integrated

formula

Funding

requiredFunding

received

• Foundation level set

to provide base

adequacy

• Weight for need

according to student/

district characteristics

and considering

regional costs

• All funds means tested

against local wealth

• State funding fills the gap

to required amount

• Districts can fund more

using local tax revenues

Weight for need

Foundationlevel

State funding

closes the gap

Local contribution determined by formula

Added local funding

GSA

formula

Categorical

Supplemental

grant

Chicago block

Integrated

formula

Categorical

Simplify how state dollars are distributed...

An integrated primary State funding formula accounts for

student need and local resources...while funding districts according to student

need and local ability to pay

Integrated

formula

Categorical

• Combine all GSA and most

categoricals

• Allocate according to a single,

transparent, integrated formula

Categorical

Page 7: Illinois School Funding Reform | SB 1

Accounting for need and local resources:

Another view

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Page 8: Illinois School Funding Reform | SB 1

Current vs. Proposed FormulaCurrent General State Aid (put in place in 1997)

• State GSA Payment = (Foundation Level – Available Local Resources Per Pupil) * ADA

• Alternate Formula if district % of local wealth is at least 93% but less than 175% of Foundation level

• Flat Grant of $218 * ADA if local wealth is at 175% of Foundation Level

• Also account for numerous other ‘silos’ of funds/programs in the State budget.

Proposed Primary State Aid

• State PSA Payment = (Weighted Foundation Level – Available Local Resources Per Pupil) * ADA

• Flat Grant of 3.5% of Foundation Level; for non-PTELL, may be adjusted to account for local tax effort for Ed and O&M levies

• Flat Grant applies if (Weighted Foundation Level – Available Local Resources) <Flat Grant Level

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Page 9: Illinois School Funding Reform | SB 1

Weighted Foundation Level• Weighted Foundation Level = Foundation Level *

District Weighted Average

• District Weighted Average = 1.0 + Additional Weights (on a cumulative basis)

• Additional Weight = Weighting Factor * Weighting Percentage

• Regionalization: If applicable, a regionalization factor is applied to the District Weighted Average.

• The regionalization factor is based on the Comparable Wage Index developed for the National Center for Education Statistics (which measures systemic, regional variations in the salaries of college graduates who are not educators)

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Page 10: Illinois School Funding Reform | SB 1

Additional WeightsCategory Weighting Factor Weighting % Notes

English Language

Learners

.20 ELL%

Low-income .25 - .75, depending on

concentration

Low-income % Low-income: Current

DHS count for 2 years;

then 185% of FPL

Special Education 1.0 > of 13.8% or

district %, up to

18.8%

Private placement,

group home, and Sp Ed

Transp. Excluded

Sp Ed Summer

School

.03 % Eligible

Gifted .01 % Eligible No more than 5% of K-8

High School

Outcomes

.02: AP, dual credit

.03: Career Pathway

% Eligible Only in one category

Reg. Transp. .6 - .10, based on

density/sq. mile

% Eligible

Vocational or

Extraordinary

Transp.

.12 – Vocation

Not to exceed .12 -

Extraordinary

% Eligible ISBE to define

“extraordinary” by rule

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Page 11: Illinois School Funding Reform | SB 1

Special Education• In the Formula:

• Weighting fully accounts for three existing line items: Children Requiring Special Education Services, Personnel Reimbursement, Summer School Services

• SB 16 had assumed that each district had 13.8% of students with disabilities (consistent with state average). SB 1 allows districts with an above-average weight to receive ISBE approval for a higher % (up to 5% above state average).

• Out of the Formula: Sp Ed Transportation and Private Placement

• Orphanage Tuition: Maintain separate categorical funding for group homes; include foster children in primary State aid formula

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Page 12: Illinois School Funding Reform | SB 1

PTELL, Adequacy Grant, Loss Cap, Phase-in

• PTELL: PTELL Adjustment remains, but:

• Subject to a “PTELL EAV floor” of .85. The EAV Floor ensures the EAV used for PTELL adjustments never falls below 85% of a school district’s actual EAV. This significantly controls the costs of PTELL adjustments.

• PTELL Adjustments granted separately to ensure greater transparency within primary State aid calculations

• Adequacy Grant: Targets funding to relatively low-spend, high tax districts to achieve an “adequacy target”.

• Low Spend: Determined based on the district’s operating expense per pupil in comparison to an “adequacy target” based on the EFAB recommended funding level and the district’s weights based on its student characteristics.

• High Tax: Operating Tax Rate higher than statewide weighted average for that type of district.

• Loss Cap: No district will lose more than $1,000/pupil in comparison to base year, through 2022-23 school year.

• Phase-in: Decreases and increases from base year phased in over 3 fiscal years:

• Year 1: 25% of increase; 25% of decrease

• Year 2: 50% of increase; 50% of decrease

• Year 3: 75% of increase; 75% of decrease

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Page 13: Illinois School Funding Reform | SB 1

Oversight & Accountability• ISBE Support: Dedicated funding for ISBE staff & contractual services for ELL

and Special Education oversight and support

• Reporting: For each district, reporting of weights and funding attributable to those weights

• ELL: Maintain accountability consistent with current law for district budgeting and accounting for funds attributable to the weighting of ELL students

• District Plans: For districts failing to make insufficient academic progress for subgroups, budget and plan meeting ISBE requirements must demonstrate budgeting for strategies giving priorities to low-income, ELL, and special education students consistent with weighting

• CPS School Allocations: Maintain the current SGSA requirement for $261M to be distributed to schools pursuant to an ISBE-approved plan

• School Based Budgeting: Beginning in the second year of the law’s implementation, ISBE institutes a system for accounting for revenues and expenditures at the individual school level, which would highlight inequities that may exist within a school district.

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Page 14: Illinois School Funding Reform | SB 1

Review Committee & Adequacy Study

• Primary State Aid Review Committee: Must include school district representatives reflecting geographic and socio-economic diversity of state. Recommendations by January 31, 2017 addressing:1. Relating funding to district accountability or accreditation status

2. Whether to include State CTE and special education transportation in the formula

3. Whether to account for municipal impact fees, TIF distributions, available fund balances, etc. in ALR calculation

4. Methods for reducing PTELL adjustments

• Adequacy Study: ISBE is to contract for a study of the adequacy of education funding in the State. Procurement and contracting for it will occur as soon as the bill is enacted and funding is appropriated for the study. The study must be completed within 10 months after contract issuance.

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Page 15: Illinois School Funding Reform | SB 1

Increased Investment from the State

• Sponsors and supporters of SB 1 have called for a $500

million increase in State Aid to School in Fiscal Year 2016.

• Approximately $125 million for the new targeted hold harmless

provision.

• ISBE is calling for an increase of $729 million in Fiscal

Year 2016.

• Governor Rauner’s budget proposal contains an increase

of $490 million for education in Fiscal Year 2016. Note:

this is not reflect the net change.

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Page 16: Illinois School Funding Reform | SB 1

More Work Ahead

• Vision 20/20

• Determining “Adequacy”

• SB 1403 (Sen. Barickman)

• Mandate Relief

• Other cost reduction and/or efficiency measures

• Accountability Measures

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Page 17: Illinois School Funding Reform | SB 1

Addendum 1

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Page 18: Illinois School Funding Reform | SB 1

Addendum 2

• ARTICLE X | ILLINOIS CONSTITUTION

• SECTION 1. GOAL - FREE SCHOOLS A fundamental

goal of the People of the State is the educational

development of all persons to the limits of their capacities.

The State shall provide for an efficient system of high

quality public educational institutions and services.

Education in public schools through the secondary level

shall be free. There may be such other free education as

the General Assembly provides by law. The State has the

primary responsibility for financing the system of

public education.

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Page 19: Illinois School Funding Reform | SB 1

Addendum 3

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