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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.

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