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Reforming Education Funding

Written by John Gordon

After missing the first two installments of state payments to local school districts, the Illinois General Assembly has approved a new education funding mechanism in legislation that also includes a tax credit for scholarship donations, some school mandate relief, and several other measures.

Senate approval on Tuesday (with a vote of 38-13-4) followed a dramatic Monday evening vote (73-34-3) by the Illinois House on Senate Bill 1947. The House vote came after a failed first vote on the bill and a failed attempt to override Governor Bruce Rauner’s amendatory veto of Senate Bill 1. The bill still needs the Governor’s signature and he has pledged to sign it.

Once signed, schools will begin to receive the approximately $6.7 billion in state funding that is currently on hold. Senate Bill 1947 contains much of the same language of Senate Bill 1. A new evidence-based formula for school funding incorporates 27 elements considered essential to high-performing schools, such as reduced classroom sizes, updated technology and computers, advanced teacher training, and increased support for English-learning students. By using the availability and cost of these elements, the formula establishes a unique adequacy target for each school district. Those that are determined to be the furthest from their adequacy targets will receive the largest share of the new dollars appropriated for education. The bill also contains a hold-harmless provision that ensure no school district sees a decrease in the funding they received in the 2016-2017 school year. Chicago Public Schools receives pension assistance from SB 1947, as the state will pick up CPS’ normal pension costs (approximately $221 million) under the bill.

SB 1947 also includes a new measure providing $75 million in tax credits to individuals and businesses that donate to scholarship organizations that provide financial assistance to low and middle-income families who send their children to private school or an out-of-district public schools. Students whose guardians earn an income of up to 300% of the poverty level will be eligible to receive these scholarships. The tax credit is worth 75% of the amount donated and is capped at $1 million per donor for a given year. An independent organization will be tasked to assess the students who receive these scholarships in comparison to similar students in public schools to determine if the private institutions are effectively instructing these students. Any approved scholarship organization must prove that it is spending no less than 95% of its contributions to provide scholarships to eligible students. This program is set to expire in five years unless it is reapproved by the legislature and the Governor.

Senate Bill 1947 also includes measures regarding property taxes. It allows Chicago Public Schools to go beyond its current legal cap on its levy for teacher’s pensions. The current rate is 0.383 on taxable property within the district. The bill allows CPS to extend that rate up to 0.567 if it so chooses. The bill would also allow for certain school districts to lower their property taxes via ballot initiative. If a school district is at 110% of its adequacy target, then voters in the district may put an initiative on the ballot that lowers the school districts property tax levy by up to 10%, granted that at least 10% of registered voters within the district sign a petition asking to do so.

The bill also:

  • Provides a certain amount of mandate relief for school districts. Districts may choose to lower the physical education requirement from five days per week to three days per week if they so choose, while also allowing for greater flexibility for students who take part in athletic extracurricular activities. School districts may also choose to contract out driver’s education.
  • Allows for the expediting of requirement waivers. Waivers that need approval of the General Assembly will be sent to the four legislative leaders for consideration. If at least three of the four leaders want further consideration of a waiver request, then the request is sent to the full legislative body. If less than 3 of the leaders send a request of further consideration, then the State Board of Education may decide to accept, modify, or reject the request without action from the General Assembly.

Once signed, the legislation is effective immediately. It is important to remember that this formula is for distributing new state dollars and its predicated on increasing state education spending by at least $350 million per year for the next ten years. Some education advocates say that this amount may not be enough to properly fix the education funding system in Illinois, even with these latest improvements. It will be vital for the General Assembly to continue to increase education spending by the state, or the new funding model may fall short of its goal of increasing the percentage of education funding that is taken up by the state and promoting education equity and adequacy across Illinois.

 

Illinois School Funding Still in Limbo

Written by John Gordon

Governor Bruce Rauner has made good on his promise to issue an amendatory veto on the school funding reform bill that passed both chambers of the General Assembly. Senate Bill 1, sponsored by state Sen. Andy Manar (D-Bunker Hill) overhauled the way in which the state funds public schools by instituting an evidence-based model that would distribute new funds to schools that are furthest away from their unique adequacy targets while maintaining current levels of state funding to ensure no school district experiences a loss of state funds from the 2016-2017 school year.

The urgency behind the debate on SB 1 stems from the recently passed budget. In the budget bill, it states that approximately $6.7 billion in state funds to schools must be distributed through an evidence-based model. This means that if SB 1 or a similar bill with an evidence-based model is not signed into law before the new school year begins, then the state will not be able to legally distribute those funds. If those funds are not released, then school districts will be faced with the possibility of closing their doors if they cannot find the funds to continue.

The biggest changes to the bill from the Governor’s amendatory veto are the hold-harmless provision that ensures no school district loses money, the provisions concerning the pension obligations for Chicago Public Schools (CPS) and the block-grant CPS receives from the state and the minimum funding level recommendation.

Hold-Harmless

Senate Bill 1 included a “hold-harmless’ provision that ensures no school district receives less funding from the state than it did during the 2016-2017 school year. This hold-harmless provision is calculated at the per-district level in SB 1. Governor Rauner changes this in his amendatory veto by calculating a school district’s hold-harmless at the per-pupil level beginning in the 2020-2021 school year based on average student enrollment. Advocates for SB 1 point out that, under this change, if a school district experiences a loss in student population then it will lose state funding.

Chicago

In SB 1, both the normal pension costs for CPS and the block-grant are folded into CPS’ hold-harmless funding. The Governor stated this is tantamount to a bailout for CPS at the expense of suburban and downstate school districts. In his amendatory veto, the Governor takes the approximately $200 million CPS receives from the block-grant and distributes it throughout the rest of the state. He also moves the CPS pension pick-up to the pension code. SB 1 proponents argue that taking the block-grant away from CPS in the fashion that Governor Rauner does in his amendatory veto would cause CPS, by far the largest school district in the state, to lose out on new funds for classroom instruction by shifting them towards administrative costs and that moving the CPS pension pick-up is beyond the scope of his amendatory veto powers.

Funding Levels

Illinois school districts currently receive approximately 25% of their funding from the state, with majority of the remaining funding coming from local sources of revenue, namely property taxes. One of the main goals of SB 1 is to increase the percentage of state funding to Illinois schools over the next decade. The stated funding objective laid out in SB 1 is to increase state funding by $350 million per year. If that amount is not appropriated, then whatever increased amount is appropriated will be dispersed more progressively to school districts that are furthest away from their adequacy targets. In his amendatory veto, Governor Rauner eliminates that language and does not replace it with any figure. Not maintaining the $350 million level will delay the goal of decreasing the reliance on local dollars within a decade and will make it difficult for more school districts to reach adequacy levels set in SB 1 than if the funding minimum level is maintained at its current level.

The General Assembly now has 15 days from the issuance of the amendatory veto (August 1st) to either accept or reject the Governors amendatory veto. Both would require a 3/5 majority vote. If neither action occurs, then SB 1 dies. If that happens, then Illinois will be facing a full-blown crisis as state funding for schools will be withheld and many school districts will be forced to take drastic measures if they hope to remain open for the full school year.

Damage to Women and Families Persists in Wake of Budget Impasse

Chicago Foundation for Women, Voices for Illinois Children, and Loyola University Chicago’s Center for Urban Research and Learning today released a new report on the impact of Illinois’ budget impasse on women and children. The report, titled “Damage Done: The Impact of the Illinois Budget Stalemate on Women and Children,” was prepared by Voices for Illinois Children and Loyola’s Center for Urban Research and Learning. Illinois’ most vulnerable residents, including low-income women of color and their children, continue to bear the burden of the state’s two-year impasse, which delayed payment of contracts to social service providers and resulted in significant cuts in staff and services that cannot be quickly replaced.

Download (PDF, 1.05MB)

The new state budget and education funding: still waiting

Written by John Gordon

K-12 Education Funding Left Hanging in the Balance for Upcoming School Year

Illinois has a state budget for Fiscal Year 2018 (FY18) that began on July 1st but not the means for appropriating the dollars for K-12 education. While the legislature overrode Governor Rauner’s vetoes of the state budget and revenue bills, the budget bill (Senate Bill 6) contained language stipulating that the majority of the dollars set aside for elementary and secondary education were to be allocated according to an “evidence-based formula.” The result of this decision is that public schools in Illinois remain in jeopardy of not opening on time or only being able to stay open for a short period of time.

The amount appropriated for evidence-based funding is approximately $6.7 billion in general funds and reflects a consolidation of five prior education line items (General State Aid, bilingual education, transportation for special education students, special education personnel, and services for extraordinary special education pupils). This is an increase of $776 million from the FY 17 funds. The formula incorporates $5.9 billion in general funds into the new formula as part of a “hold-harmless” provision, which ensures no school district receives less funding from the state than they received in the 2016-2017 school year.

The evidence-based formula, by which this pool of dollars is to be allocated, is outlined in SB 1.  That bill combines 27 weighted elements into the current school aid formula including the number of low income students, special education students, students for whom English is not their first language, and up-to-date text books. The amount of money the district received in the last academic year (a district’s “Base Funding Minimum”) is then combined with the district’s local available resources. Match that against the adequacy level and the difference determines the additional state funding for the district under SB 1 -with more money going to those districts further away from their adequacy level.

The formula then separates school districts into four tiers based on their adequacy targets, with districts in Tier 1 being the furthest away from their adequacy target and districts in Tier 4 being at or above their targeted level. There is a little over $353 million in funding allocated to help districts make gains towards their targets, with 99% of the funds going to districts in tiers 1 and 2.

The main point of contention between the proponents of SB 1 and the Governor is that the FY 18 normal pensions costs for Chicago Public Schools (CPS) is incorporated into CPS’ Base Funding Minimum (approximately $221 million). The Governor believes this is equivalent to a “bailout” for CPS, while CPS and the advocates of SB 1 argue that Chicago is placed at a disadvantage because the state picks up the pension costs for every other school district.

As a consequence of the Governor’s threat, one of the Senate sponsors of the bill placed a procedural motion on it that holds the bill in the Senate and prevents the chamber from sending it to the Governor. Absent SB 1, or any similar bill, there’s no way for the State Board of Education to send the $6.7 billion to local school districts. Without the dollars, some Illinois schools may not open in August.  Others might be able to open the doors but depending on the district’s finances could not keep them open through the school year.

Therefore, either the legislature could send the Governor SB 1 and, if he vetoes it, attempt to override the veto, send a new piece of legislation, or the legislature could send SB 1 to the Governor as a part of a compromise that includes a package of other bills that he would sign into law.

Higher Education

While elementary and secondary school administrators are left wondering what will happen with their state dollars, SB 6 provides funding for FY18 (as well as funds appropriated for costs incurred in FY17) but that funding generally represents a 10% cut from FY15.

The state’s public university system suffered enormously due to the budget impasse. Five universities saw their credit rating lowered to junk status, enrollment dropped at a majority of the state universities, and Monetary Award Program (MAP) grant recipients were left with uncertainty on if their awards would be honored. (MAP provides college grants to low-income students.) Area economies that rely on a healthy university saw a downturn. With a full budget in place, these institutions and their students can begin to take stock and plan for a future with some stability.

During the last two fiscal years, Illinois funded its universities in stopgap appropriation bills. Averaging the funding for the last two years, you can see the comparison to FY15 (the last prior year Illinois had a full-year budget). The numbers show the real damage sustained by the state’s higher education system from the two-year impasse.

 

FY16-FY17 Average % change from FY 15 FY 18 % change from FY 15
Chicago State University $29,805,700 -18.0% $32,697,400 -10.0%
Eastern Illinois University $30,507,100 -29.0% $38,678,100 -10.0%
Governors State University $18,409,050 -23.5% $21,656,000 -10.0%
Illinois State University $55,258,850 -23.5% $65,004,000 -10.0%
Northeastern Illinois University $28,230,300 -23.5% $33,209,000 -10.0%
Northern Illinois University $58,747,950 -35.5% $81,983,500 -10.0%
Southern Illinois University $128,554,550 -35.6% $180,912,800 -9.3%
University of Illinois $415,221,800 -35.8% $583,005,900 -9.9%
Western Illinois University $37,377,400 -27.3% $46,300,700 -10.0%
Community Colleges $176,316,400 -36.0% $248,030,500 -10.0%

 

Not only did students face uncertainty with courses, staff, and programs cut, but there was no appropriation for Monetary Award Grants until this budget passed. Not only does SB 6 provide funding for the recently ended fiscal year ($365 million) but the program receives $401 million in funding, a 10% increase from FY 15.

While funding is in place for FY18, state university administrators still have difficult choices to make with a 10% cut from FY15. It is unclear whether faculty and staff let go by the universities during the last two years will return. In some cases, students facing the uncertainty of not having a MAP grant curtailed their academic careers. Certain university faculty, watching the financial uncertainty of the state and its universities, left the state. A state budget is in place but it may take time for our universities to recover.

SB 1- Leveling the Playing Field

Written by John Gordon

The current attempt to reform how Illinois funds school districts in the state is at a critical point. Both the Senate and the House have passed a bill that would allow new state dollars to flow to school districts in the most financial need, giving more kids opportunities for the quality education that they deserve and that is their constitutional right. Governor Rauner, while expressing support for much of what the bill proposes, declared his intent to veto the legislation. As of now, the bill remains in the Senate chamber as lawmakers and advocates attempt to persuade the Governor to sign the bill into law.

The Problem

As it currently stands, school districts in Illinois rely heavily on local taxes, largely property taxes, for funding. Roughly 67% of all school funding in Illinois comes from local taxes, while the state only provides approximately 25%.1 This has led to a very inequitable system. For every $1.00 spent on a non-low-income student, Illinois spends $0.81 for every low-income student.2 This system is also a main contributor to Illinois having among the highest property taxes in the nation.3

Senate Bill 1 aims to change this by setting a goal for increased levels of state funding for education and a system to distribute new dollars for education to those school districts in the most need of more funding. The overall goal of Senate Bill 1 is to increase funding for education by $350 million per year over the next ten years to bring the state closer to parity in terms of funding education. This funding would need to be appropriated every year by the General Assembly. The $350 million is a goal, not a set law.

How Does the New Formula Work?

One of the main provisions of Senate Bill 1 is the “Hold-Harmless” provision. This means that no school district in the state can receive less state funding than it received in the 2016-2017 school year. This is done by creating a “Base Funding Minimum Level” for each school district.

The bill also instructs the State Board of Education to establish unique “Adequacy Targets” for each school district in Illinois, based on figures that influence school spending and school needs. The adequacy targets take into account the Base Funding Minimum Level described above, the availability of local resources, and what the bill refers to as “Essential Elements” needed to ensure K-12 students in Illinois are able to graduate high school and attend college. These 27 elements have been identified by academic research. Some of the 27 elements include:

  • Up to date textbooks and learning materials
  • Up to date technology for classroom instruction
  • Increased funding for low-income and special education students
  • Increased support for students who are learning English
  • Limited classroom sizes

Where Will the Money Go?

The bill groups school districts based on how their local available income meets the established adequacy goal. The first group of districts (Tier 1) are those who are at less than 65% of their adequacy targets. The second level of school districts (Tier 2) are those who are between 65% and 90% of their adequacy targets. The third level (Tier 3) are districts between 91%-100% of their targets. The fourth level (Tier 4) are districts that are above 100% of their targets.

Per the State Board of Education, 77% of school districts in Illinois are in Tiers 1 and 2. In the bill, 99% of the new funding (the $350 million stated above) would be distributed among these school districts to increase their adequacy levels.

Property Tax Relief

Senate Bill 1 also establishes a property tax relief fund. This fund, which is also subject to appropriation, would allow school districts in high-tax, low-wealth areas of the state to receive relief in their property tax bills. If a district receives this relief grant from the state, it must reduce its levy in the following year by the dollar amount they received from the state. As stated earlier, this is subject to a separate appropriation from the General Assembly. The more the G.A. appropriates for this fund, the number of school districts that can receive this benefit will increase.

Chicago

Due to its sheer size, Chicago Public Schools (CPS) both receives and carries burdens that other school districts in Illinois do not. For example, CPS receives a block grant from the state of approximately $250 million that other districts do not receive.  However, CPS is responsible for the pensions of their unit’s teachers, while the state covers the pensions for teachers in every other school district.

The bill attempts to address both Chicago’s educational and pension needs in the bill. The block grant and CPS’ normal pension costs are added to the district’s Base Funding Minimum Level. This does indeed help Chicago with their pensions, but it comes at a cost. If these two factors were not included in CPS’ Base Funding Minimum Level, CPS would receive a larger per-pupil funding increase than they are with these two factors included.

It is important to remember that the Chicago Public School System educates roughly 20% of the state’s overall student population. Of all students in CPS, approximately 84% are low-income.4 Any attempt to reform the school funding formula in Illinois to raise the level of equity between wealthy and non-wealthy school districts will have some benefit for Chicago.

The Necessity of Proper Funding

All of the reforms in Senate Bill 1 are predicated on proper funding levels from the state. Again, the stated goal in Senate Bill 1 is to increase the level of state funding to school by $350 million per year for the next ten years. The bill does prepare for the possibility that the state will fall short of this in any given year by distributing whatever funding is appropriated more progressively to those districts furthest away from their adequacy targets. This would reduce the level of new funding to schools in Tiers 3 and 4 to practically zero. But the lower the amount of new funding from the state, the less effective the formula will be at reducing inequality. The reduced funding will also continue to place the burden of school financing on local tax dollars, which is the biggest drivers of the inequity among school districts in Illinois.

This makes the need for a full budget agreement this summer and a return to the normal year-to-year budget process all the more critical. If the state continues down its current path, a new funding formula will be lost among the instability and financial ruin.


1. Illinois State Board of Education 2015-2016 Report Card

2. The Education Trust

3.New York Times, March 10, 2017 “Highest and Lowest Property Tax Rates in the U.S.”

4.Illinois State Board of Education 2015-2016 Report Card, Chicago School District 299

Protect Health Care for Illinois Children by Rejecting the American Health Care Act

Written by Mayumi Grigsby

Given the impact it will have on the lives of more than 1.4 million children covered by Medicaid and the Children’s Health Insurance Program (CHIP)[1], members of the state’s congressional delegation need to reject the proposed legislation, to repeal the Affordable Care Act (ACA).Health care

The proposed America Health Care Act (AHCA) that passed the U.S. House and which the U.S. Senate is now considering, would cut federal Medicaid funding by $834 billion over ten years and make other damaging structural changes to the Medicaid program.  Although little is known about the Senate bill to repeal and replace the ACA as of this writing, reports indicate that the emerging bill differs little from the House bill.

These cuts would likely mean curtailment or loss of medical services for Illinois children and their families covered by the program.

Medicaid Populations in Illinois

Medicaid provides health care coverage for Illinois’ most vulnerable groups: low-income children and their families, pregnant women, persons who are disabled, and seniors.

  • More than three million Illinoisans are covered by Medicaid and that includes nearly half of the state’s children are covered by the program.
  • Sixty-one percent of Medicaid enrollees in Illinois are people of color, so changes and funding cuts to the program would have a disproportionate impact on children of color and their families.
  • Medicaid, CHIP, and other public health insurance programs cover nearly half (44%) of children with special health care needs.[2]

Changing the Affordable Care Act’s Medicaid Expansion

Prior to the ACA, Medicaid coverage was limited to low-income parents, children, cash assistance recipients, seniors, and people with disabilities. Medicaid eligibility prior to the Medicaid Expansion was about $8,870 a year for a family of three and childless adults were ineligible. The ACA allowed states to expand their Medicaid program to include all non-elderly non-disabled adults with incomes up to 138 percent of the poverty line. Illinois was one of 31 states (along with the District of Columbia) to do so.

Illinois MedicaidI

Source: Center on Budget and Policy Priorities

The AHCA would fundamentally change how the federal government funds Medicaid.  Currently, the federal government covers 90 percent of the cost of new enrollees under the Medicaid expansion. The AHCA would lower the matching rate for new enrollees qualifying for the expansion coverage.  Starting in 2020, rather than paying 90 percent of the cost of covering these enrollees as it would under current law, the federal government would only pay 50 percent of the cost.  This represents a huge cost shift to states; it is projected that in 2021, Illinois would have to pay an additional $864 million to maintain the Medicaid expansion.  More likely, the state would be forced to cut coverage for the 635,800 Illinoisans in the Medicaid expansion.

Shifting Costs to States

Medicaid enrollment CHIP

Source: Kaiser Family Foundation

The AHCA would further shift Medicaid costs from the federal government to the states by implementing a per capita cap. The federal government now contributes a fixed amount to a state’s Medicaid costs- in Illinois this is about 50 percent of total Medicaid costs. Under a per capita cap, the federal government would only pay up to a fixed amount per beneficiary. The state would then be responsible for additional and unanticipated costs, for example, an opioid crisis or a Zika outbreak. This per capita cap could lead states to cut benefits, cut enrollment, and cut payments to doctors and providers to lessen the state’s Medicaid costs. This could lower payment rates for pediatric providers and thereby threaten health care coverage for children.

The AHCA would also let states choose between a block grant for Medicaid, rather than a per capita cap. The “Flexible Block Grant Option for States” would give states the option to receive a portion of their federal Medicaid funding through a grant.[3] This amendment eliminates requirements that state Medicaid programs cover preventive child health care services for individuals under the age of 21, such as the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services. EPSDT services are required, preventative, health and developmental assessments and vision, dental and hearing services, as well as diagnostic and treatment services to improve physical and mental health conditions. Eliminating these requirements would impede all children’s opportunity for a healthy future.

Cuts to Medicaid Funding Would Mean Fewer People are Covered

For some children with special health care needs, access to Medicaid is based on the child’s need and not on the family’s income. This pathway makes it possible for children with special needs to access care while still living at home with family. States use waivers to receive federal matching funds to allow them provide long-term and supportive services to seniors and people with disabilities in their homes and communities. Illinois covers this population of children using a Medicaid home and community-based services waiver called the Medically Fragile/Technology Dependent Children waiver. Cuts proposed in the AHCA could force states to cut back on spending on Medicaid services, putting necessary Medicaid home and community-based services waiver programs at risk.

Special Education

Cuts to federal funding for Medicaid could also threaten funding for special education in schools. The Individuals with Disabilities Education Act (IDEA) ensures access to public education for children with disabilities. Under this law, the education needs of the child are outlined in an individualized education plan (IEP). Medicaid pays for some of these services, which tend to be perpetually underfunded in spite of a federal commitment, for children enrolled in Medicaid.

In 2015, the federal government contributed more than half – $144,391,000 out of $286,388,260 – of Medicaid spending in Illinois schools. These cost-shifting changes to Medicaid and cuts in federal spending proposed in the AHCA would pose a significant burden on Illinois as the state would have to find ways to meet the increased financial burden.

Waiving Pre-Existing Condition Prohibition

Additional harm could come to children and their families due to the AHCA allowing states to:

  • Charge higher premiums for pre-existing coverage if they create “high risk pools”
  • Do away with “essential health benefits” requirements. In Illinois, essential health benefits include pediatric oral and vision coverage and newborn care.  Curtailment of these services could negatively impact important services required to ensure healthy development in children.

Since maternity services were not commonly covered pre-ACA and reports suggest that waivers would be easily attainable by states under the AHCA, these changes could lead states to weaken requirements ensuring coverage for maternity care.

People residing in states modifying the essential health benefits’ requirements would see “substantial increases in out-of-pocket spending on health care” and services likely to be excluded include “maternity care, mental health and substance abuse benefits, rehabilitative and habilitative services, and pediatric dental benefits.”

House GOP Health Bill

Increasing the Number of Uninsured

According to the nonpartisan Congressional Budget Office (CBO), if the AHCA passes, there will be 23 million more uninsured people under age 65 by 2026 than would have been uninsured under the ACA.

Benefits of Medicaid

Studies show children with Medicaid coverage are healthier teenagers. These children perform better academically and are less likely to drop out of high school and more likely to graduate from college. They are also more likely to surpass their families’ economic status and are less reliant on the government. Medicaid expansion also gives coverage for maternal depression, particularly for low-income women and women of color. Maternal depression is known to stymie healthy development in children. Curtailing access to Medicaid and CHIP for children – particularly low income, children of color – denies them access to a better future.

Action is needed now

As of this writing, the state comptroller shows the state has a backlog of bills topping $15 billion. The AHCA would lead the state to lose $40 billion over 10 years and would also shift $24 billion in Medicaid costs over ten years to the state of Illinois.

The AHCA proposes changes that would lead to a loss of coverage for children. The bill would make it particularly difficult for children with special health care needs to continue to access the care they need to remain healthy and succeed in life.

Illinois’ U.S Senators have signaled their opposition to the AHCA.  The Governor, members of the legislature, and citizens across the state need to join them in opposing the measure and fighting for continued and quality health care coverage for Illinois children.


[1] Medicaid covers children age 0 to 6 with family incomes of up to 133% of the federal poverty level (FPL); and for children, age 6 to 19 with family incomes of up to 100% FPL. The Children’s Health Insurance Program (CHIP) is available for children, age 0 to 19, with family incomes too high for Medicaid. (http://southeastgenetics.org/aca/medicaid-chip-infographic.pdf) In Illinois, the program providing coverage for children is called “All Kids.” All Kids includes the state’s Medicaid and State Children’s Health Insurance Program (SCHIP) programs. Coverage is offered to all uninsured children, regardless of income, health status or citizenship. (https://kaiserfamilyfoundation.files.wordpress.com/2013/01/7677.pdf)

[2] http://www.kff.org/medicaid/issue-brief/medicaid-and-children-with-special-health-care-needs/

[3] http://avalere.com/expertise/managed-care/insights/per-capita-caps-could-reduce-funding-for-children-covered-by-medicaid

Higher Education Funding Cuts, Reduced Enrollment

The on-going impasse in Springfield continues to put a severe strain on the public university system in Illinois. As the legislature and governor fail to approve a complete budget for the fiscal year, it puts universities in the unenviable situation of having to raise tuition and fees while also looking at ways to cut costs. Some recent examples:

  • Southern Illinois University has reduced staff by almost 10% between the academic years starting in 2014 and 2016. It has reduced its authorizing budget by $21 million since the beginning of the budget impasse. Just last week, Southern Illinois University trustees approved a loan of up to $35 million from Southern Illinois University-Edwardsville to support its Carbondale campus.
  • Since 2016, Eastern Illinois University has reduced its workforce by more than 500 people (from 1,743 employees to 1,224 employees).
  • Chicago State University eliminated more than 400 staff positions in 2016.
  • Governors State University this year approved eliminating 22 degree programs and raises tuition by 15%.
  • Northern Illinois University has announced a reduction of 150 staff positons for Fiscal Year 2018.
  • As a cost-cutting measure, Northeastern Illinois University shut down the campus for three days last month. It has also required employees to take furlough days during the last two academic years.


State University Budget Cuts

university funding May
MAP funding

 

Student Enrollment
As the funding issues continue, it appears to be having an impact on the enrollment of full-time students.

university enrollment

 

In fact, Chicago State University enrolled just 86 freshman this fall.

This decline coincides with a trend that has been occurring throughout the decade. Illinois is among the nation’s leaders in outmigration of graduating high school students, with an estimated net loss of over 16,000 students. This is not a recent development; Illinois high school students have been leaving the state for college in increasing numbers.

Illinois out-of-state students

Source:  Illinois Board of Higher Education

Illinois high school and college students deserve a world class higher education system that allows them to compete in the world economy. As it currently stands, Illinois is underfunding its universities with subsequent staff and program cuts.

This graduate season it is worth contemplating the higher education system we want for our state.  More survey data might be needed for a more accurate picture to explain enrollment declines.  However, it seems the state’s high school and college students see what the future might hold for Illinois’ higher education system and are leaving.

Written by John Gordon

What do Illinois’ Moms want for Mother’s Day?

How about continued health care coverage?  As of the beginning of this year, there were 1,679,700 women and girls enrolled under the state’s Medicaid program.

Medicaid provides health care coverage to low-income children and their families, pregnant women, persons who are disabled and seniors. In Illinois, the program currently covers approximately 3.1 million people overall. In addition, there are 649,000 Illinoisans are enrolled under the Affordable Care Act (ACA) – 288,464 of them are women.

Most women covered by the state’s Medicaid program are low-income women of color – 28% are African American and 26% are Hispanic. Medicaid covers services related to preventative screenings, maternal health and long-term care affecting senior women – services that impact women inter-generationally. As an example, Medicaid financed 50% of all births in the state of Illinois in 2014. With Medicaid responsible for funding so many services specific to women’s health care, the recent U.S. House passage of the American Health Care Act (AHCA) endangers crucial coverage for Illinois women and their children.

Medicaid and Women 1 - T

The bill is before the U.S. Senate for consideration. The Congressional Budget Office (CBO) estimated that an earlier version of the bill could lead to a loss of coverage nationally of 24 million people nationwide by 2026. The newest version has not been scored by the CBO. However, changes in the bill before the Senate could lead to higher costs and additional loss of coverage.

Fewer Uninsured
Prior to the ACA, eligibility for Medicaid coverage was limited to “children, cash assistance recipients, seniors, and people with disabilities”. The ACA’s Medicaid Expansion allowed 32 states, including Illinois, to include women with incomes at or below 138 percent of the poverty line. With Illinois choosing to opt into the Medicaid Expansion, the number of uninsured women in the state, aged 18 to 44 has dropped from almost 18% to 13.4% in 2016.

uninsured

Those improvements are now at risk.

Overall, the bill cuts $839 billion in federal spending from Medicaid over ten years. One estimate puts Illinois’ potential financial loss over ten years at $40 billion.

Two significant funding changes in the AHCA are lowering the federal matching rate (or Federal Medical Assistance Percentage -FMAP) for new enrollees covered under Illinois’ Medicaid expansion and implementing a spending cap for each enrollee in the state’s Medicaid  program. (In Illinois, if the FMAP falls below 90%, state law requires that coverage ceases at the end of three months following changes in the FMAP.)

Among its other changes, the federal bill allows a state to:

  • waive the ACA’s community rating (which contains a prohibition against charging higher premiums for pre-existing coverage) if it creates a “high risk pool” and
  • waive the “essential health benefits” requirements.

High Risk Pool
How did these high risk pools work in the past?  In the pre-ACA era, they generally led to enrollment caps and unaffordable premiums. While the AHCA has allocated $130 billion in funding for high-risk pools, even if all of the funding were used for these pools, they would still be underfunded by at least $200 billion.

The cost of higher premiums for pre-existing conditions places an undue burden on women. Prior to the ACA, pre-existing conditions included prior C-sections, breast or cervical cancer, receiving medical treatment for domestic or sexual violence, and/or clinical depression. In Illinois, 26% of the population would have had a pre-existing condition that would make  them uninsurable.

Essential Benefits
While essential health benefits vary by state, the ACA provides a floor with a list of benefits that insurers are required to cover. In Illinois, these include: hospitalization, maternity, coverage for prescriptions, pediatric oral and vision coverage and newborn care, as well as preventative services like mammograms and bone density screenings. While the AHCA maintains preventative services for private plans, those requirements would no longer apply to the Medicaid Expansion population, meaning a loss of much needed services by women in that population.

Instead of taking away Mom’s health care coverage, let’s remind our federal officials this week (which is National Women’s Health Week) of the great strides we’ve made under the ACA and the great gift it has provided to Illinois women and their families.

Written by Mayumi Grigsby

Deadbeat Illinois

When the week ended, the State of Illinois had a backlog of bills totaling $12.2 billion dollars. That amount represents a backlog in vouchers of 140,000.[1]

The bill backlog problem is not new.  Going back more than six years, the state had a backlog of nearly $7.9 billion at the end of 2010. In the following four years, there were fluctuations in the amount as the state worked to whittle down its bills.

However, as the chart below from Illinois Comptroller Susana Mendoza’s office shows, it has been a steady uphill climb since the budget impasse began (July 2015).

historic trend bill backlog

Just who is waiting for payment by the state?  On the same day that the Governor presented his proposed budget to the legislature, his Office of Management and Budget (GOMB) also put out an update on outstanding bills[2].  Using its own data and that from the Comptroller, the composition of outstanding bills was as follows at the end of January (when the bill backlog was just $10.9 billion):

outstanding bills

As noted by GOMB, the totals “do not include all bills received by state agencies that have not been processed by the Comptroller due to lack of FY16 and FY17 appropriations”. In a number of cases, particularly regarding human services, the state signed contracts with providers for services during the fiscal year even though there was not an appropriation for the full year.

Each outstanding bill also accrues interest the longer it waits to be paid. For self-insured providers of the State Employees Group Insurance Program, the interest is 9% annually after 30 days of non-payment. Most other bills accrue interest at a rate of 12% annually after 90 days of non-payment[3]. Comptroller Mendoza has noted that if the state budget situation does not change by the end of the fiscal year, the state could owe up to $700 million interest on a bill backlog that would approach $15 billion[4]. One proposal in the legislature is to borrow money to pay a portion of the bills and incur a lower interest rate.

What Illinois needs is a balanced budget with sufficient revenue that allows it to provide the necessary services to its citizens and pay its bills.

 

[1] http://ledger.illinoiscomptroller.gov/fiscal-condition/#general-funds

[2] https://www.illinois.gov/gov/budget/Documents/Bill_Backlog_Presentation_for_January_FY17.pdf

[3] http://cgfa.ilga.gov/Upload/3YearBudgetForecastFY2017-FY2019.pdf

[4] http://thesouthern.com/news/local/govt-and-politics/interest-payments-add-to-illinois-budget-stalemate/article_9ea46b58-d9de-574a-83e8-652520d8a3c6.html