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General School Funding

General School Funding . General State Aid Illinois School Code 105 ILCS 5/18-8.05. State, Local and Federal Funding. State, Local and Federal Resources For Elementary & Secondary ($ in Millions). FY 2009 Federal Programs By Appropriation. Economically Disadvantaged (Title I) $737 M

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General School Funding

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  1. General School Funding General State Aid Illinois School Code 105 ILCS 5/18-8.05

  2. State, Local and Federal Funding

  3. State, Local and Federal ResourcesFor Elementary & Secondary($ in Millions)

  4. FY 2009 Federal ProgramsBy Appropriation • Economically Disadvantaged (Title I) $737 M • Special Education (IDEA) $598 M • Child Nutrition $525 M • Teacher/Principal Training (Title II) $165 M • Safe & Drug Free Schools (Title IV) $ 70 M • Career & Technical $ 60 M • Bilingual (Title III) $ 40 M • Innovation (Title V) $ 14 M • Others $ 40 M • Total $2,249 M

  5. Local Funding(2006 EAV & Tax Rates) • Property Taxes $ 13,110 M • Debt Service $1,285 M • Education $8,974 M • Operations $1,528 M • Transportation $ 358 M • All Others $ 965 M • CPPRT $ 794 M • Total $ 13,904 M

  6. Property Tax System • Equalized Assessed Valuation – EAV • Tax Rates for Various Purposes • District Request for Property Tax Revenue – Levy • Payment to District for Property Taxes – Extension • Operating Tax Rate X Total EAV = Extension • Maximum that a district can receive (no bonds)

  7. Exemptions • Non-PTELL Districts • Loss of local property tax revenue at the district tax rate • A gain in General State Aid 2 – 3 years down the road at the formula rate • PTELL Districts • No local loss if tax rate below maximum • Estimated that GSA would be minimally impacted Note: The 7% cap in Cook County has a different effect on GSA

  8. PTELL • Property Tax Extension Limitation Law • Referred to as “Tax Caps” • Limits the Amount the Extension can Increase over the Previous Year • Linked to the Consumer Price Index (CPI) • Legislated for Collar Counties(1991) Cook County (1994) • Limiting Rate X Total EAV = Extension • Maximum that a district can receive (no bonds)

  9. Comparison • Non-PTELL • Operating Tax Rate X Total EAV = Money to District • Operating Tax Rate is Fixed, EAV Varies so Money to District Adjusts • PTELL • Limiting Rate X Total EAV = Money to District • Money to District is Fixed (increase limited to CPI) • EAV Varies so the Limiting Rate Adjusts • In Both Cases We are Talking About the Maximum

  10. PTELL Highlights Fiscal Year 2008 • 39 Counties Subject to PTELL (38%) • 461 (53%) Districts • 78% of the ADA • 63 Counties NOT Subject to PTELL (62%) • 9 - Failed Referendum • 54 – No Vote • 412 (47%) Districts • 22% of the ADA • Double Whammy Adjustment Cost - $805.5M

  11. Fiscal Year 2007Total State Revenues by Source(All Funds - $’s in Millions) • Income Taxes $11,158 22.9% • Sales Taxes 7,631 15.6 • Federal Aid 12,999 26.6 • Road Taxes 2,742 5.6 • State Lottery (gross) 957 2.0 • All Other 13,344 27.3 • Total $48,831 100.0%

  12. Net Lottery Proceeds

  13. FY 2007Appropriations by Purpose(All Funds - $’s in Millions) • Elem & Secondary $8,749 18.0% • Higher Education 2,825 5.8 • Transportation 2,183 4.5 • Human Services 20,747 42.8 • Public Safety 2,307 4.8 • Environment &Nat Res. 559 1.2 • Gov’t Services 2,947 6.1 • All Other 8,177 16.9 • Total $48,494 100.0%

  14. State Funding • General State Aid – provide unrestricted grants-in-aid to Illinois school districts in an equitable manner. Foundation level formula and poverty grant formula. • The objective of categorical programs is to reimburse districts for the expense associated with providing services to or for targeted populations.

  15. FY 2009 State Funding • GRF (60 + programs) • General State Aid / HH $4,616 M • Mandated Categoricals $1,782 M • Other $ 988 M • Non-GRF • School Construction $ 0 M • School Infrastructure $ 5 M • Driver Education $ 18 M • Others $ 12 M • Total $7,421 M

  16. Mandated Categoricals • Lunch/Breakfast $ 26.3 M • Regular Orphanage $ 11.6 M • SE Extraordinary $331.1 M • SE Orphanage $101.8 M • SE Personnel $426.1 M • SE Private Tuition $151.6 M • SE Summer School $ 11.0 M • SE Transportation $383.3 M • Regular Transportation $339.5 M • Total $1,782.3 M

  17. Other Major Categoricals • Early Childhood $380.3 M • Reading Improvement $ 76.1 M • Bilingual Education $ 75.6 M • Career & Technical Education $ 38.6 M • Extended Learning Opportunities $ 22.2 M (Summer Bridges) • Standards, Assessment and Accountability $ 36.3 M • Alternative Learning $ 18.5 M

  18. General State AidFoundation Formula - Local Resources per Student) (Foundation Level x Students

  19. Provisions of GSA Formula • Fixed Foundation Levels thru FY 2009 • $4,225 $4,325 $4,425 $4,560 $4,560 $4,810 $4,964 $5,164 $5,334 $5,734 $5,959 • No Continuing Appropriation (eliminated in FY 2003) • Unweighted ADA used as Pupil Count • Greater of prior year or prior 3 year average • Calculation Rates • 3.00% - 2.30% - 1.05% • Alternate Formula (7% to 5%), Flat Grant ($218) • Separate Poverty Formula

  20. Effect of EAV Increase to GSA • For every $1 Million increase to the EAV used to calculate GSA for a foundation district: • Unit Districts Lose $30,000 in GSA • Elementary Districts Lose $23,000 in GSA • High School Districts Lose $10,500 in GSA • They may have gained in local property taxes if their local rate is higher than the formula rate • The EAV is not used for GSA until 2 years after the tax extension (2006 EAV used in 2007 tax extension is used for FY 2009 GSA)

  21. Available Local Resources (ALR) • ALR = (GSAEAV x Rate + CPPRT) / ADA • where Rate = 2.30% for elementary • 1.05% for high school • 3.00% for unit • Local Ratio • A L R / FLEVEL

  22. Three Formulas • Foundation (Less than .93) • (FLEVEL - ALR) x ADA • Alternate Method (.93 up to 1.75) • 7% to 5% of FLEVEL x ADA • Flat Grant (1.75 and greater) • $218 x ADA

  23. Complicating Issues • Cost of the Double Whammy Adjustment FY 2000 - $46M FY 2008 - $806M (over 1600%) • Actual Tax Rates Falling Below Formula Rates • Complexity of PTELL in Overlap Counties • Applying Audited ADAs when 3 Year Avg has been Utilized • Effects of TIFs, Enterprise Zones, Property Tax Exemptions, etc. & PTELL vs Non-PTELL

  24. Supplemental GSAPoverty Grant Formula • Low Income Concentration Level • 3 Year Average of DHS Count divided by ADA • 0% to 15%: $ 355 x Low Income Count • > 15% : (294.25 + 2700 x squared concentration) x Low Income Count

  25. Poverty Grant (2007-2008) 2006-07 Poverty Category#ADACountGrant • No Grant 74 5,339 0 0 • Flat Grant 230 567,325 45,631 $16,988,865 • > 15% 640 1,335,534 617,117 $768,434,713 • Total 944 1,908,198 662,748 $785,423,578

  26. 2007-2008 FINAL GSA(in Millions) DistrictsPctGSAPct ADAPct Foundation 68672.7% $4,205.6 95.3% 1,500,104 77.7% Alternate133 14.1% $ 155.0 3.5% 346,542 18.0% Flat Grant51 5.4% $ 21.0 0.5% 77,123 4.0% Lab/Alt/Safe74 7.8% $ 31.6 0.7% 5,511 0.3% Total 944 100.0% $4,413.2 100.0% 1,929,280 100.0%

  27. 2007-2008 FINAL GSA(in Millions) DistrictsPctGSAPct ADAPct Chicago1 0.1% $1,091.1 24.7% 366,239 19.0% Other Cook14615.5% $ 607.5 13.8% 359,850 18.7% Collar150 15.9% $ 700.6 15.9% 540,617 28.0% Downstate647 68.5% $2,014.0 45.6% 662,574 34.3% Total 944 100.0% $4,413.2 100.0% 1,929,280 100.0%

  28. 2007-2008GSA Hold Harmless(in Millions) DistrictsPctHHPct Other Cook 5 6.2% $ 5.3 22.5% Collar 18 22.5% $ 6.1 26.0% Downstate 57 71.3% $ 12.1 51.5% Total 80 100.0% $ 23.5 100.0% Note: The FY 2008 Appropriation is $20.7M

  29. General State Aid (Districts Only) Decreases Increases FY 1999 FY 2008 FY 2008 FY 1999 FY 1999 FY 2008 HH Base FY 2008 FY 1999 FY 2008 FY 1999 FY 2008 FY 1999 6% 5% 3% 60% 25% 1% 50 45 23 521 219 12

  30. Why is the Distribution of General State Aid Changing Regionally?

  31. EAV Highlights • 45.9% Increase • 53.5% Growth in Cook/Collar (79% of EAV) • 22.4% Growth in Downstate (21% of EAV) • 14 Counties (>35% increase) • 9 Counties Increased over 50% • 20 Downstate Counties Decreased

  32. ADA Highlights • 2.1% Increase • 2.8% Increase in Cook/Collar (66% ADA) • 10.9% Increase in Collar Counties (Cook County decreased by 2.5%) • 0.8% Increase Downstate (34% ADA) • 76 Counties Decreased • 8 Counties Decreased 10% or more

  33. Per Pupil Statistics By District Type

  34. Spending per Pupil by Type2006-2007(Data Not Included for 2 Non-Operating Highs)

  35. EAV per Pupil by Type2005 EAV

  36. Education Funding Advisory Board

  37. Statutory Requirements for EFAB • EFAB shall make recommendations … for the foundation level …and for the supplemental general state aid grant level … for districts with high concentrations of children from poverty. • The recommended foundation level shall be based on a methodology which incorporates the basic education expenditures of low-spending schools exhibiting high academic performance.

  38. EFAB Reports • Initial report in January 2001 (FY02) • $135 increase to FLEVEL, utilize max of 3-yr avg or prior year ADA, lower poverty threshold to 15%, continuing appropriation • Interim report in January 2002 (FY03) • $120 increase to FLEVEL, new poverty count and formula, continuing appropriation • Comprehensive report in October 2002 (FY04) • $1,105 increase to FLEVEL, new poverty count and formula, reinstate continuing appropriation. (Property tax abatement and income tax increase to fund formula changes) • Report of May 2005 • $1,441 increase to FLEVEL, apply the Employment Cost Index (ECI) to the Poverty Grant Formula, reinstate the Continuing Appropriation • No Report in January 2007

  39. Adequacy Models • Economic Cost Function • Attempts to determine the amount needed per pupil for the desired level of performance • Multiple Regression Model • Complicated Statistical Model • No state was using this model (2006 research) • Successful School District • Identifies school districts at the desired performance level • Calculates a weighted average from the expenditure level • Outliers are eliminated so data could be skewed • Professional Consensus • A group of educational professionals identify the components of a prototype school • Once the components are identified they are then “costed out” • Can lead to a “maximum” rather than “adequate” level • Combination of Methods • Uses the best of the 3 models • School level not district

  40. EFAB Methodology • Contracted with Augenblick & Meyer for a replicable methodology to produce an adequate funding level. • Based on the Successful School District Model • First used in the October 2002 report • Requested foundation level was $5,665 • Criteria Used: • Two Most Current Years of Test Data • Low-Income Percentage • Minimum % Meeting Standards – 67% • Use the Per Capita Tuition charge • McMahon Index used as Cost Adjustment • Updated for the May 2005 Report - $6,405

  41. Proposed Changes To School Funding

  42. Task Force on School Finance • Legislative Task Force • 28 Months - Final Report January 1991 • New Formula • $3,898 --- Reduced Weightings • Restructure of Permissive Tax Rates • Property Tax Relief based on Education Fund Tax Rate

  43. Governor’s Commission • Business/Education Task Force • 10 Months - Final Report March 1996 • New Formula • $4,225 --- No weightings • $1.5 Billion in Property Tax Relief • Tax Rate Roll Back • $2.1 Billion Income Tax Increase • Constitutional Amendment

  44. Edgar-Madigan • Outgrowth of Governor’s Commission • Final Days of FY 97 Session • SB 645 Amendment #1 • New Formula • $4,200 --- No weightings --- Separate Poverty • $900 Million in Property Tax Relief - $ for $ • 1% Income Tax Rate Increase

  45. Committee of Eight • Two legislators from each chamber • Late Fall & Early Winter of 1997 • Tons of simulations with estimated data • Passed HB 452 – Effective FY 1999 • Contained in spirit the GSA recommendations of the Edgar Commission • Continuing appropriations for GSA & HH

  46. Education Caucus • Voluntary Membership • No Time Limit • Look at Education Issues – Especially Funding

  47. House Bill 750 • $2.7 Billion Property Tax Relief • 2% Increase to Personal Income Tax • 3.2% Increase to Corporate Income Tax • Broaden Sales Tax Base • GSA Foundation Level = $5,952 • Increased Annually by the ECI • Poverty Grant Formula Components Increased Annually by ECI • Special Education Personnel Funding Increase

  48. Senate Bill 2288 • $2.9 Billion for Property Tax Relief – FY 2010 • Minimum Property Tax Relief – 80% • Supplemental Property Tax Relief – 20% • Invest in Illinois Fund • Fund Capital Programs for the State • Beginning in FY 2010 $1B is to be appropriated • Early Childhood Fund • Special Education Personnel Funding Increase • General State Aid • Beginning in FY 2009 Increase Poverty Components by ECI • 4-Year Phase-In of the Foundation Level - $6,974 • FY 2010 – FY 2013 (ECI increased each year of phase-in) • Distinction Between Pre-Reform Foundation Base and Additional Base Support • School Improvement Partnership Pool Fund

  49. Website Links • ISBE: http://www.isbe.net/ • Funding: http://www.isbe.net/funding/default.htm • GSA: http://www.isbe.net/funding/html/gsa.htm • Budget: http://www.isbe.net/budget/default.htm • ILEARN: http://webprod1.isbe.net/ilearn/ASP/index.asp • School Finance: http://www.isbe.net/finance/default.htm

  50. Contact Information • Toni Waggoner • Budget Division of the Illinois State Board of Education • Email: twaggone@isbe.net • Phone: 217-782-0249 • Please feel free to contact me for any questions.

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