School Funding Issues Grow
Commission Looks at Changes
Our school district has historically been in a relatively healthy financial position. In large part, this is because our district is supported by a strong local tax base and sound fiscal management. Several factors beyond our control have changed this, and the administration and Board of Education continue to monitor our financial situation closely. School funding is an extremely complex and political issue, and is my intention to share more and more about this in the coming weeks to keep you informed of what is taking place in the state of Illinois, as well as Peru Elementary School District 124.
Mandated Categorical Payments
One source of state funding is what are called mandated categorical payments. At this time, the State of Illinois is behind in these payments to our district a total of $214,534.03. This is money that is owed to the school district for reimbursement for mandated expenses already incurred by the district last year, as well as the year prior. This includes reimbursement for mandated programs such as regular and special transportation, special education costs and the state breakfast and lunch program.
General State Aid Formula
The much more complicated and larger Illinois school funding issue is the general state aid (GSA) formula, which is the lifeblood of many local school districts. Article X, Section 1 of the Illinois Constitution states in part that the state “has the primary responsibility for financing the system of public education.” In fact, the state of Illinois provides under 30 percent of public education funding, instead shifting the burden to local property taxpayers and thereby creating the most inadequate and inequitable school funding in the nation.
How much has Illinois underfunded general state aid for schools?
Illinois ranks dead last in the country in percentage of state funding provided to its schools. It didn't used to be this way, but to put some numbers behind it, the upcoming recommendation by the Education Funding Advisory Board (EFAB) for GSA per pupil funding places the minimum foundation level at $9,204. Sadly, the current GSA formula level is $6,119 per pupil, a number that has not changed since fiscal year 2010, and that is also over 33 percent short of the recommended foundation level. But it only gets worse.
The state legislature has not even fully funded the seven year old $6,119 formula. In fact, the legislature typically funds the GSA formula at around 89 percent of the foundation level established from 2010, resulting in an actual level of $5,446. This is actually 41 percent short of the EFAB recommended funding level. The Illinois State Legislature has underfunded the GSA formula by billions of dollars over recent years, which has crippled the poorest districts the most, and has put a much greater burden on the backs of local property tax payers.
How has this impacted our school district?
This does not mean that the state provides each school district with $5,446 of funding per student! Not even close. In Peru ESD 124, this typically works out to around $1,200 to $1,400 per pupil in actual funding. Our GSA funding is our second largest funding source outside of local property taxes, which is what the formula makes us depend on to fund schools.
In fact, 70-80 percent of our funding typically comes from local sources, the largest being property taxes. Unfortunately, the 2008 housing market crash caused a very large decrease in local property values, as our local tax base dropped by 13 percent over a five year period from 2010 - 2015. Combined with the state funding situation, this has taken a huge toll on our school district's finances.
As a result, we have reduced 18 staff positions over the previous six years, as our total number of employees has dropped from 126 to 108. We run a tight ship and just like any household or business, when revenues fall short, expenses eventually have to be reduced to make ends meet. The problem in schools is that demand does not decrease when times are hard. In fact, in times like this the needs of students and demands for services usually increase. Instead, we have had to increase class sizes and make some other changes and adjustments while we go through these challenging times.
The good news is we were prepared. We were conservative with our funds when times were better, and built up healthy and responsible fund balances. Unfortunately, we have utilized much of those fund balances even while making staff reductions and other cost saving efforts. But we are still in a decent position because we managed through things the best that we can, while still providing an excellent education for our students.
A Change in the School Funding Model?
We are doing what we can locally, even though we have had to do some things we don't want to do. We are not asking the legislature and Governor Rauner to do anything outside of providing the funding to which our students, school district and local taxpayers deserve. Whatever a person's view on taxes or politics, the fact is that Illinois has higher property taxes because property taxes work directly inverse to the state funding that is provided to its schools. The state of Illinois has a responsibility to adequately and equitably fund its schools, and we are doing the exact opposite.
Our professional organizations continue to work to be proactive in this regard, and as a result the Illinois School Funding Reform Commission appears to be carefully reviewing the evidence-based funding model (click for a short video explanation) as a potential option to replace the broken system we have in Illinois. We applaud Governor Rauner for appointing the commission, and are very glad to have our own Senator Sue Rezin, as well as neighboring Senator Jason Barickman as active and participating members of the commission.
We will continue to provide information as this develops, as we believe parents and taxpayers need to be well informed on these issues. If you have any questions or if you would like additional information, please feel free to call me at (815) 223-1111. As always, thank you for your support of our children and our schools.
Mark R. Cross, Superintendent