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 April 24, 2013 | By Diane Rado

In the federal government’s view, an estimated 1,339 poor schoolchildren live within the affluent Arlington Heights-based School District 59. But the state counted 3,536 poor students when it doled out a “poverty grant” to the district this school year.

Across Illinois, the state counted some 1 million low-income students — more than twice the federal numbers — in calculating poverty payments to districts, a Tribune review of school finance data shows.

The more low-income children, the more poverty funding districts get. And the state’s use of an unusual and little-understood formula that liberally counts children as disadvantaged when they are enrolled in various social service programs has spurred a sharp rise in low-income students, the newspaper’s analysis shows.

Those numbers, in turn, have prompted skyrocketing poverty grant expenditures totaling nearly $10 billion over the past decade — money that also goes to the wealthiest school districts in the state, including Arlington Heights-based District 59.

“We really do have a lot of poor kids,” said Assistant Superintendent Ruth Gloede, whose district received a $4.4 million poverty grant this year.

The struggle for money during the state’s fiscal crisis has spurred questions and criticism about how the poverty funding is distributed and which districts should get first claim. Of chief concern is that, with so many more kids defined as low-income, the poverty grants are accounting for an increasingly larger chunk of overall state education aid.

That general state aid is designed to distribute money equitably and help districts that have lower property values and fewer local tax dollars to support their schools.

The “general state aid” for public schools is calculated at $4.8 billion this year. About $1.8 billion goes toward poverty grants, about 37 percent of the total, up from about 12 percent a decade ago, records show.

The Tribune analysis of state data showed that:

•Chicago suburban districts have seen the greatest gains in low-income students and poverty funding. So have many affluent districts scattered across the state. In fact, the 72 most property-rich districts in Illinois — the majority of them in the Chicago area — received $22 million in poverty grants, according to state data.

•Some well-off districts with small but rising numbers of low-income kids did not qualify for grants before but now receive poverty money. More than 100 of those districts, in communities including Kenilworth, Winnetka, Wilmette and Lake Forest, received grants this year, even though some already spend more than $20,000 per pupil.

•At the same time, Chicago Public Schools’ share of the poverty money has declined, while still representing $796 million of the roughly $1.8 billion in poverty grants offered this year. Two dozen of the state’s most impoverished districts also saw drops in poverty funding.

Among those poorer districts is south Cook County’s Gen. George Patton School District 133 in Riverdale, where enrollment has declined, lowering the poverty grant to about $1.1 million compared with a peak of $1.5 million over the last few years.

“How can you justify taking money from this district when we have so little?” Patton Superintendent Frankie Sutherland said.

Calculating poverty

Over the last decade, the state implemented a formula that counts low-income children enrolled in social service programs for needy families, including Medicaid, children’s health insurance and food stamps, now called the Supplemental Nutrition Assistance Program.

Numbers in some of those programs have ballooned, in part because families can enroll and still have income above federal poverty levels.

For example, the base poverty level for a family of four this school year is about $23,000 under federal guidelines. But income eligibility for a children’s health care program — used in the state’s low-income count — can be twice that, about $46,000.

lllinois’ low-income population at schools spiked after the state began using so-called DHS or Department of Human Services counts, from 508,600 to almost 1.1 million between 2001 and 2011.

In contrast, the U.S. Census Bureau data on poverty in school districts — used to provide federal poverty money to states — estimates 443,000 children ages 5 to 17 living in poverty in Illinois, a figure that includes both public and private school students.

The state’s figure eclipses even the number of students eligible for free and reduced-price meals at Illinois schools — a measure that most states use to determine how much poverty money should be handed out, said Michael Griffith, a senior policy analyst for the Education Commission of the States, a Denver-based research and policy group.

Griffith said he doesn’t know of any other state that uses Illinois’ array of social service programs to count low-income children, in part because collecting that data has been a challenge.

Tim Knowles, director of the University of Chicago’s Urban Education Institute, questions who is benefiting from the Illinois formula.

“I would argue that this has probably been a formula that has been adjusted and readjusted to meet political interests, particularly in the form of spreading the pot across a greater array of communities instead of concentrating it in the communities that need it the most,” Knowles said.

It’s not unusual for states to provide extra money to districts with disadvantaged kids. Being poor hurts students and lowers achievement, researchers say, and children in high-poverty schools need extra help to make the grade.

The debate is over how much money is needed and how it should be distributed.

Every bit helps

Gen. George Patton’s Sutherland said the high concentration of low-income children in her district and their extreme need should make such districts the primary focus of poverty grants.

“There are so many different degrees to poverty,” she said. “Are you talking about kids who can’t get school supplies, or are you talking about kids who can’t eat?”

But in wealthy Lake Forest, “every bit that we get helps,” said Jennifer Hermes, assistant superintendent of business services for Elementary District 67 and High School District 115.

“We are still under the same mandates as everybody else, and part of the original funding concepts of public education is that if we are under these same mandates, then everyone should get something,” she said.

Each of the Lake Forest-based districts had fewer than 100 low-income students and received about $26,000 in poverty grants this year.

DuPage’s Burr Ridge-based Community Consolidated School District 180 saw the biggest percentage increase in poverty funding in Illinois — nearly 3000 percent. It received about $1.4 million this year, compared with $47,500 in 2005-06.

District 180 is among the 72 most property-rich districts in the state, but Superintendent Tom Schneider said it draws many children from a 1,200-unit subsidized housing complex.

The number of low-income children in his district jumped from 99 to 586 between 2001 and 2011.

In Niles School District 71, another of the state’s most property-rich districts, Superintendent Amy Kruppe said her diverse one-school district is a place of “haves and have-nots,” and she needs the poverty funding to help her disadvantaged students.

The district received about $234,000 in poverty money this year and is using it to station multiple teachers and specialists in classrooms where they can help small groups or individuals.

“We rely on it just as everyone else does,” Kruppe said. The number of low-income children in her district has grown from 27 to 233 in the past decade.

No formula for allocating poverty funding is perfect, experts say.

Before the early 2000s, Illinois used U.S. census data for counting low-income kids, but district officials increasingly complained about that.

“At some point you were working with figures that were 10 years old, in communities that had poverty going up significantly or down in those 10 years,” said Dean Clark, a veteran member of the Education Funding Advisory Board.

That board recommended a more current low-income measurement of schoolchildren enrolled in social service programs. It was aware at the time that the DHS numbers were going to be far higher than U.S. census numbers and would increase the size of the grant program, records show.

Also at issue, Clark recalled, was that districts with less than 20 percent low-income children in their enrollment weren’t eligible for any poverty money. The advisory board thought they should get something — though less than districts with higher concentrations of poverty.

So in 2002, lawmakers approved allowing those districts to get poverty funding of at least $355 per pupil, a figure that stands today. The grants go up to a maximum of $2,994 per pupil, depending on the concentration of poverty in a district.

A year later, lawmakers also approved the plan to move to the DHS count of low-income children.

Larry Joseph, director of the Fiscal Policy Center at the advocacy group Voices for Illinois Children, prepared a study in 2010 showing what he said were significant flaws in the poverty grant formula, including the mushrooming DHS low-income count that caused disparities across districts.

His study determined that attendance figures in the formula worked in an unexpected way: Higher average attendance results in smaller poverty payouts because it reduces the concentration of low-income kids.

“There’s an incentive for truancy,” said Ted Dabrowski of the Illinois Policy Institute, which has raised concerns about the poverty grant program, including what he believes to be a lack of transparency and accountability.

The Illinois State Board of Education considered reducing the poverty grant dollars per pupil, but nothing was decided.

State School Superintendent Chris Koch said a larger conversation about retooling all aspects of the school funding formula should occur, and “poverty grants have to be on the table.”

 ‘All these advantages’

In Illinois, several school administrators interviewed by the Tribune said they had no idea how the state calculated the poverty grants.

“It’s just kind of a mystery as to where some of these numbers come from,” said Angie Smith, assistant superintendent for business and operations in the sprawling Plainfield District 202.

U.S. census numbers show 1,730 poor children there. But more than 6,000 were counted in calculating the district’s nearly $3 million poverty grant, records show.

Glenn McGee, president of the Illinois Mathematics and Science Academy, used to be superintendent of the wealthy Wilmette School District 39. He said he doesn’t think his former district should get any poverty money.

Wilmette received about $47,000 this year for about 150 low-income students, state data show.

“They have all these advantages,” McGee said. “That money could be going to communities that have higher concentrations of poverty.”

In Arlington Heights-based District 59, Gloede said her property-rich district gets little regular state aid, so the poverty dollars are crucial to help its disadvantaged children, many of whom live in mobile home parks near O’Hare International Airport.

Gloede knows there has been talk of reducing money to rich districts but offered this plea:

“Don’t take my poverty money,” she said.

Read the article at Chicago Tribune.com.

   View/download PDF

Speakers:

Paula Corrigan-Halpern, policy advocacy director, Voices for Illinois Children
David Lloyd, senior policy analyst, Fiscal Policy Center at Voices for Illinois Children

This webinar examines:

• The causes and effects of Illinois’ continuing fiscal crisis;
• The factors driving the spring budget debate in Springfield;
• Proposed funding levels for human services and education;
• How to maximize existing revenue and close tax loopholes to pay down bills and avoid further cuts; and
• Specific options to dig Illinois out of its fiscal hole and create a long-term sustainable budget.

Additional resources:

• “Maximizing Available Resources” policy bulletin
• “Utilizing Surplus Revenue Outside the General Funds” fact sheet

Members of the Illinois House, back in their home districts this week, have 25 days remaining in the spring session, and a lot on their plates. There’s public pension reform, concealed carry legislation, and a potential gaming expansion.

Last but not least, there’s the annual, depressing ritual of crafting a state budget.

Do you have an idea how your tax dollars should be spent? This morning, Crain’s published a nifty app that allows regular citizens to take a shot at balancing Illinois’ FY 2014 General Revenue Fund—that’s the hunk of the budget subject to the appropriations process that provides support for education, health care, human services, and public safety. I wrote about the state budget consistently during Gov. Pat Quinn’s first term, and I’ve never seen an interactive tool quite like it. Everyone should check it out.

But before we play Michael Madigan for a day, it might be helpful to refresh our collective memories about where the money in the state budget comes from and what it pays for. The Crain’s site has plenty of data and charts to help with that crucial context, but I’m partial to the work of Manya Khan from Voices for Illinois Children, a top-flight, left-leaning think tank here in Chicago. Last month, Khan published a quick but thorough primer, using data from FY 2012, spelling out in clear detail the building blocks of the state’s general revenue fund.

First, here’s where the money comes from:

The Land of Lincoln raised $33.8 billion in 2012, over half of which came via the income tax. The state sales tax only brought in 21 percent of total revenue. (As Whet has pointed out before, Illinois has a fairly high sales tax rate, but it has a narrow base, since consumer services are largely exempt.)

Second, this is what we spend it on:

What does this graph show?

• One quarter of our tax dollars were devoted to education, with two-thirds of that total distributed to more than 860 local districts in the form of General State Aid. (Illinois still relies heavily on property taxes to fund its schools.)
• DHFS—which runs Medicaid, the Children’s Health Insurance Program (CHIP), All Kids—takes home about 20 percent. That number will rise over time as more people lose their private insurance, though the federal government is primarily footing the bill, at least for a few years, for the Medicaid expansion mandated by the federal health reform law.
• Contributions to the five state-funded retirement systems sucked up 12 percent of spending.
• In all, our lawmakers spent roughly $600 million more than they took in.
• The state also carried over about $8.5 billion in overdue bills, a number they’ve since trimmed slightly.

Public services have already been trimmed enough for my taste, so on the Crain’s tool, I tinkered with the revenue side. (For what it’s worth, I was not shy about my preferences a few years ago, and they haven’t change dramatically since.)

The math added up on the Doster budget, but I imagine it was a bit easier without a powerful speaker staring me in the face and constituents clamoring at my office door.

Give it a try and see how you do.

Read the article at Chicago Magazine.com.

Read Policy Bulletin.

We very much appreciate this opportunity to speak before the Senate Appropriations II Committee today as you carefully weigh how the state can best invest in education to improve the outcomes for all students. 

Today we encourage you, in your deliberations on the FY14 ISBE budget, to restore funding to General State Aid and prioritize funding for the Early Childhood Block Grant and bilingual education.  

   View/download full testimony.

The Illinois Department of Human Services (DHS) plays a vital role in strengthening families and supporting children so they fulfill their potential. Since FY09, critical initiatives that ensure children’s health, provide child care in enriching environments, build strong social and emotional skills in children and teens, treat the toxic effects of trauma, and offer academic support to youth have been cut repeatedly. For example, the Child Care Assistance Program, which provides low-income parents with access to affordable child care while they work or go to school, has been cut by 62 percent since FY09 — resulting in thousands of families being unable to provide quality child care for their children. The Illinois Children’s Mental Health Partnership —  which saves the state approximately $19 million each year by reducing unnecessary psychiatric inpatient hospitalization for children — has been cut by $2.9 million in the DHS budget since FY09.

These cuts are not good for children. They’re not good for families. And they threaten our efforts to ensure a bright future for everyone in our state.

Today we encourage you, as you deliberate on the FY14 budgets, to prioritize the following cost-effective interventions and strategies funded by DHS that improve children’s lives and contribute to efforts to address the state’s short- and long-term fiscal stability:

• the Illinois Children’s Mental Health Partnership;
• Home visiting programs, including Healthy Families Illinois and Parents Too Soon;
• Early Intervention services;
• Teen REACH; and
• Child Care Assistance.

  View/download full testimony.