Education Inequality: Spending Cuts Cause Greatest Harm to School Districts That Can Least Afford It

Sep 1, 2012

Credit WUIS/Illinois Issues
It’s been a decade since a blue-ribbon panel outlined an ambitious plan designed to finally force the state to provide an adequate level of funding for Illinois schoolchildren.

But, just as they’ve failed in the past, Illinois policymakers have again fallen far short of the goals laid out in the 2002 Education Funding Advisory Board report. The state’s recently approved budget will leave many school districts having to dip into their reserve funds, take out loans or, if labor contracts allow for it, cut personnel and programs to deal with a $161 million cut in general state aid.

Particularly hard hit will be districts that receive most of their funding from the state because they don’t generate enough local property tax revenues to meet the foundation level.

From the 13,800-student Cicero school district west of Chicago to the 623-student Zeigler-Royalton district in southern Illinois coal country, there are more than 50 school districts in Illinois that rely on the state for more than 60 percent of their funding.

A broken sign marks Zeigler-Royalton High School.
Credit WUIS/Illinois Issues

“This budget hits those schools that are the have-nots the hardest,” says Roger Eddy, a former downstate school superintendent and state representative who now serves as executive director of the Illinois Association of School Boards. “Those who have the least get hurt the most.”

When the fiscal year 2013 budget figures were finalized in late May, it was as if the past five years of education funding reform efforts had been erased.

In its 2002 report, the special committee — known in legislative parlance as EFAB — released a report saying the base level of funding for each school student in the state should be more than $5,500 a year. At the time, the task force calculated that foundation level at $4,560 per student.

Over time, the funding benchmark slowly crept up to $6,119 per student, with local school districts paying what they could toward that amount on the assumption that the state would kick in the rest. School districts in areas with high property values may not need any state aid to reach the base level of funding, while poorer school districts might need a larger chunk of state money.

But with the state’s budget woes coming to a head in the wake of the recession and crushing pension and Medicaid costs, lawmakers and Gov. Pat Quinn approved a budget for the last fiscal year that only provided 95 percent of the foundation level. In the latest budget — for Fiscal Year 2013, which began July 1 — they cut the level of funding even further, telling schools to only expect about 89 percent of the $6,119 per student.

That leaves school districts receiving less general state aid this fiscal year than was the foundation level in the 2008 fiscal year.

What’s more, the latest target for the foundation level is far short of the $6,119 amount widely discussed in Springfield as the funding goal. The latest EFAB report says the base level of funding to provide a student with an adequate education these days should be $8,360 per year.

That latter amount wasn’t even on the legislative radar screen last spring as budget negotiators divvied up state money across various state programs, ranging from Illinois’ overcrowded prison system to its child welfare services. To meet the EFAB-recommended level of $8,360 per student, the state Board of Education estimated it would cost almost $4 billion in additional revenue at a time when the governor was trying to close prisons and shutter centers for developmentally disabled citizens.

The resulting budget means an overall cut in state school funding of about 3.6 percent to local school districts. But the reductions affect individual districts differently. Districts in areas with high property values won’t see as much of a drop in overall revenue as districts that are property poor.

For the most part, Illinois schools already rely largely on local government revenue — property taxes — to pay the bills. According to the New America Foundation, a Washington, D.C.-based education think tank — only South Dakota and Nevada pay less overall in state funds for schools.

State Sen. Kimberly Lightford, D-Maywood, says the reductions contained in this year’s budget could mean that monthly state aid payments could come to an end in May, while students are still in school.

“This is unacceptable,” says Lightford, who is vice chair of the Senate Education Committee.

George Wilkerson, superintendent of the Zeigler-Royalton school district, says the district has funds in reserve, but those are expected to run out within two years under current budget conditions. The small, southern Illinois district relies on the state for about 72 percent of its general state aid. To grapple with this year’s state funding cut, Wilkerson says he likely won’t replace one teacher who left the district this summer. The district also is in talks with nearby Christopher about consolidating.

It all adds up to a frustrating situation, he says.

“I don’t know if you can print how I feel,” Wilkerson says. “The school board is going to be very challenged in making some tough decisions. It’s not going to be an easy process.”

By the numbers, the drop in school funding will affect about 700 school districts, according to the state Board of Education. Those districts constitute about three-quarters of all the state’s school districts.

The hardest hit will be school districts such as East St. Louis and Cicero, which can generate little in the way of property taxes. They rely on the state to provide nearly all of their funding to reach the foundation level. 

The tiny Geff school district in Wayne County received 83 percent of its per pupil spending in 2011 from the state. The 2,431-student Harvey school district in Chicago’s south suburbs relied on the state for 72 percent of its funding in 2011, according to the state board.

Lightford says the cuts this year were based on last year’s budget, which also included budget reductions. “That means we’ve actually lost something along the line of $500 million in school funding in the last two years,” she says. 

The decreases in state aid will mean poor school districts will drop further behind their wealthier counterparts, resulting in fewer opportunities for students, Lightford says. Not only will classes be crowded, but textbooks will be older and there will be fewer computers, she says. Extracurricular programs will be reduced, and there will be fewer dollars for counselors and nurses.

“Many of these school districts will have to cut things that are motivating for students. Students will be missing opportunities that kids in wealthier areas are already getting,” Lightford says.

Eddy says the current state budget is challenging for school districts because they couldn’t have anticipated the legislature’s decision to pare down the foundation level even more this year. School districts are hard-pressed to cut teachers because many of those labor costs are already set for the year, he says. That leaves districts looking at short-term borrowing or dipping into their reserves, if any exist.

“Basically, we’ve been telling districts since 2009 that you’ve got to be conservative,” says state Schools Superintendent Christopher Koch. “You can’t be giving huge pay raises. You’ve got to be thoughtful about revenue coming in and money going out.”

Koch says the pressure on school districts has been made worse by late payments and a decline in state aid for busing. “Going backwards on the foundation level is not a good thing,” he says.

And there isn’t much relief on the horizon. Under a proposal backed by the Democratic leaders who control state government, school districts also could be required to pay a larger share for teacher pensions as part of an effort to close a massive gap in the state’s underfunded employee retirement systems. Although the plan calls for the money to be phased in over a period of years, it still represents less money being spent on education.

“In all of these cases, you are talking about shifting money away from classrooms,” says Eddy.

One potential stopgap solution emerged during the flurry of last-minute legislative action in May.

Just before the spring legislative session ended, Senate Democrats — at Lightford’s insistence — rammed two tax measures through the upper chamber to provide more money for schools. One would institute a tax on satellite television services, while the other seeks to raise tax revenue by eliminating a provision that allowed some companies to ignore revenue from offshore oil derricks. The hope of Senate President John Cullerton is that the House will take up those measures in the fall and start to close the 11 percent cut.

Without a significant infusion of cash, Koch says the state Board of Education is investigating ways to free up more existing money for general state aid. Among the ideas being discussed is a revamping of how the state handles payments related to county-level property tax cap laws. That’s a pool of about $700 million.

The financial woes also may trigger school districts to follow the lead of Wilkerson’s colleagues in Zeigler-Royalton and Christopher, where consolidation is being discussed as a way to pare down costs and keep students from falling further behind their counterparts who happen to live in areas with greater property wealth.

Given the failure of Illinois lawmakers to provide enough money to keep up with the foundation level, should EFAB be scrapped?

“I don’t think we should forget it. I do think it’s important to arrive at what’s a real cost to educate our kids,” Koch says.

Yet, with all the stops, starts, stalls and reverses of the past decade, the prognosis for improvement does not look good. “Most people are hunkered down and know it’s not going to be a one-year problem but a several-year problem,” Eddy says.

Lightford believes school funding needs to be fundamentally restructured but says the state’s track record when it comes to providing adequate resources for schools doesn’t offer her much hope.

Lightford says, “I’m not optimistic about where this is going.” 

Kurt Erickson covers state government and politics for Lee Enterprises newspapers in Illinois.

Illinois Issues, September 2012