On Thursday, Aug. 31, Gov. Bruce Rauner signed into law Senate Bill 1947. The bill includes a new formula that will change the manner in which funding is distributed to school districts.
Many people have expressed their relief that school districts are “out of the woods.” People may have the impression that because the state of Illinois recently passed a budget and enacted a new evidence-based funding formula, the financial challenges facing school districts are over. This is not the case. The Illinois Association of School Administrators anticipates that it will take several years of state budget allocations before schools reach adequacy in funding to support education for their students.
So, how does the new evidence-based funding formula work?
Based on the individual demographics and characteristics of a school district, an “adequacy target” of funding for the district is calculated. In simple terms, the “adequacy target” is the calculated amount of money the school district requires to educate its student population based on factors supported by evidentiary research. Each school district will have a unique adequacy target as each school district serves a unique student population.
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Using a model provided by the Illinois State Board of Education (ISBE) last year, it is estimated that over 80 percent of Illinois public school districts are funded below their adequacy target, with nearly 40 percent of school districts falling below 64 percent of the funding needed to meet their adequacy target. It should be noted that last year’s model was developed using financial data from the 2015-16 school year, so adequacy targets and percentage calculations will change once current data is used.
Districts falling below 64 percent of their adequacy target are in Tier 1 of the funding formula and will receive the greatest amount of any new dollars the legislation allocates for education. Districts between 64 percent and 90 percent of meeting their adequacy target fall into Tier 2 funding. Districts between 90 percent and 100 percent of meeting their adequacy target fall into Tier 3. Finally, those districts exceeding 100 percent of their adequacy target fall into Tier 4. The goal of the new funding model is to provide those school in most financial need with the greatest amounts of new funding in an effort to move them closer to their adequacy targets.
Where is OTHS with regard to adequate funding to meet the needs of its student population based on the new, evidenced-based model?
Based on last year’s calculations from ISBE, OTHS’s funding is 62 percent of its adequacy target, thus giving OTHS access to Tier 1 funding. Adequacy target percentages for metro-east school districts are shown in the chart below.
The good news is that OTHS will receive additional dollars to support its operations in the coming school year. The bad news is the amount of additional funding that OTHS is expected to receive is not known at this time, and per an ISBE memo sent after the bill was signed, will not be known for a few months. OTHS is estimating $200,000 to $400,000 of additional state funding over the 2016-2017 allocation, but will not receive final numbers identifying the amount of state aid until a third of the school year is over.
School leaders are cautiously optimistic for the positive impact this may have for OTHS. Collectively, the new funding expected from the state, the budget cuts implemented for the 2017-18 school year, the withdrawal from BASSC (Special Education Cooperative), and an unexpected reduction in employee benefit costs will help OTHS move toward financial stability. The district is very appreciative of the dedication and efforts of its employees during the past several years of financial challenges. We are also very appreciative for the support and understanding from our families and from the community. We are hopeful that our elected state legislators will continue to work collaboratively in the future to provide funding levels that support the education of Illinois students, our leaders of tomorrow.