|
|
|
Is Equity Dead in Illinois? Presented to the Education Funding Advisory Board August 25, 2000
Prepared November 1998 The opinions and conclusions expressed in this paper are solely those of the author and do not necessarily reflect the opinions and policies of the Illinois State Board of Education. Is equity dead in Illinois? If not, it is almost certainly on it’s last legs. It has been ignored to the point that the mere mention of it raises eyebrows as if it were a four letter word. The defeat in the Illinois Supreme Court of the Committee vs. Edgar lawsuit in 1995 made it clear that education is not a fundamental right in Illinois and that equity was not of any particular legal concern. State policies and programs implemented over the past four years have all but ignored the concept of equity and little legislative concern has been shown for the topic. Equity, as used in this paper, refers to the amount of variation in per pupil expenditures among the school districts of the state. When the variation is reduced the equity increases. Many people equate equity to fairness. There are many definitions of fairness and these definitions differ among legislators, educators and taxpayers. What is fair or equitable to educators may not be fair to taxpayers. What may be fair to taxpayers may not be fair to legislators. Even individuals within these groups can not agree. What is fair to one legislator may not be perceived as fair to another. One unnamed district superintendent defined equitable funding as “my share plus 25%.” The prevalent attitude seems to be “What’s in it for my district(s)?” Little, if any, consideration is given to “what is fair to the students of the state.” With the implementation of the Illinois Learning Standards, it only makes sense that sufficient resources be made available to provide every child with the opportunity to meet those standards. While this may be viewed as adequacy instead of equity, it would address the “fairness” issue of providing each student with the opportunity to receive a quality education and prepare for a successful future. When the resource equalizer formula was developed and implemented in the early 1970s, equity was a primary concern. Laws were passed that would have controlled property taxes for educational purposes and equalized state revenues among school districts. The battle cry at that time was “Equal Expenditure for Equal Effort.” The “reward for effort” concept meant that those districts willing to exert extra tax effort, given similar tax bases, would have received additional state funding. The formula would have provided a system of education funding that would have been considered equitable by almost any definition. Unfortunately, the political forces at work at the time took over and the tax rollback provision of the law was repealed. This opened the flood gates so that the gains that would have been made toward reducing expenditure disparity were not only eliminated, but with the “reward for effort” provision of the formula, actually reversed. The “reward for effort” provision was eventually repealed due to the tremendous increase in cost to the state Since that time, property tax revenues available to school districts have far exceeded the state’s contribution to elementary and secondary education. Occasionally, the state infused significant new revenues into education, temporarily halting, or even minimally reversing, the trend of increasing expenditure disparity and the reliance on property wealth, but the overall trend continues. The following chart provides state, local and federal revenues for three points in time and shows the increasing reliance on the property tax, relative to the level of state funding. In 1975-76, the year in which the state percentage of funding elementary and secondary education (48.4%) was at it’s peak, general state aid accounted for approximately 83% of non-retirement state appropriations for elementary and secondary education. The state funded twenty-two special or categorical programs. In 1997-98, general state aid accounted for approximately 60% of the non-retirement general funds appropriations. Additionally, the state funded over seventy special purpose categorical programs. In 1998-99, general state aid accounted for approximately 64% percent of non-retirement general revenue funding, due primarily to the substantial increase in funding which accompanied the new formula. As the following charts indicate, the emphasis on targeted funding has obviously increased tremendously while the emphasis on providing unrestricted state funds to local school districts, funds to use as the districts see fit, has dramatically decreased.
Some new programs are unequalized but still basically unrestricted in nature. Through these programs, wealthy school districts receive the same per pupil grant as do poor school districts. Recent emphasis, minimal as it may be, has been to combine existing categorical programs into block grants. The distribution of these funds has not been equalized and the purpose has not been as tightly targeted. The first major example of these unequalized categorical grants was the school improvement block grant ($27 million), distributed on a per student basis. Then, in the spring of 1996, a second proposal was made to distribute $500 million in basically unrestricted funds on a per student basis. Fortunately that program, the school safety and educational improvement block grant, was scaled back to only $52 million. A third example, although not as obvious, is the K-6 Reading program. These funds are distributed on an unequalized, per student basis. While the funds are to be used specifically for reading (primarily personnel), it is considered by most districts to be “more general state aid” since they would not have hired additional elementary teachers had the need not been there in the first place. Although the titles of such grants may include a specific purpose, the intent many times is “educational improvement,” another way of saying unrestricted for any valid educational purpose. Since these funds are unequalized in any manner, equity is being ignored. The point is that more and more of the state’s funding is going into categorical programs, many of them available for unrestricted use, bypassing the effects of the general state aid formula. Legislation passed in the spring of 1998, made permanent a provision that holds districts harmless to their 1997-98 level of general state aid. While it can be argued that a temporary hold harmless is necessitated by a change in formula, it should not be permanent, as the legislation mandates. The cost of this program could easily rise to over $100 million in three years. These funds will be directed to districts with decreasing general state aid. It seems to go unnoticed that the primary reason for general state aid loss from one year to the next is the increase in local revenue, resulting primarily from increases in local property assessment. In other words, the hold harmless money, in many instances, goes to school districts needing it the least. Again, any consideration of equity seems to have been put by the wayside. The state has a history of substantially increasing general state aid funding at specific times and when it does, equity improves. The Illinois General Assembly increased funding and changed the general state aid formula in December 1997. The structure of the new formula did not substantially change; however, changes to the formula parameters (e.g. pupil count, implied tax rates, poverty) did account for a redistribution of state funds. Accompanying the change in formula was an increase in appropriation of nearly $450 million. This influx of new dollars and formula modifications did, to some extent, improve equity. It remains to be seen if future state contributions to the formula keep pace with the increase in local property taxes. Other methods of improving equity, such as changes to the property tax system and further changes to the general state aid formula and categorical funding, are discussions best left for another time. Drs. Alan Hickrod and Ben Hubbard and their colleagues measured the equity effects of the 1973 formula reform for twenty-five years. They operationalized expenditures by calculating equity indices using per pupil revenues. The revenues used were primarily general state aid and local property taxes. Because of the nature of other state programs targeted to special populations of students, (e.g. such as special education, transportation, bilingual education, gifted education, etc.), revenues for these programs were not and should not be used in the analyses. With the retirement of Drs. Hickrod and Hubbard and a general changing of the guard with regard to Illinois school finance, no one individual or institution has taken responsibility to carry the torch and monitor the equity situation in Illinois. To that end, this paper and the State, Local and Federal Financing of Illinois Public Schools, xxxx-xx publication of the Illinois State Board of Education, will now and in the future provide a history of the equity of educational funding, one that can be annually updated and tracked. If we’re serious in Illinois about having every student meet and exceed standards for learning, and therefore acquire the knowledge and skills necessary for further education and/or career, we should 1) elect state officials committed to a strong Illinois that invests in people and 2) evaluate current and future programs with the following goals in mind. · Assure that sufficient dollars (both general state aid and special categorical programs) are available to provide necessary educational opportunities for all students. · Assure fairness in the distribution of resources and educational opportunities among all students. · Assure fairness to taxpayers through a realignment of the property, sales and income taxes. While it is not the intent of this paper to advocate for pure equity in the funding of elementary and secondary education, it is the intent to at least breathe some life into the concept. This paper may not be read by a great number of individuals, but hopefully it and future publications will be available if and when discussions of equity are resurrected. The balance of the paper provides a ten-year history of selected equity indices, defined as in the past. Equity Measures The following are measures of student equity based on per student revenues. Revenues are defined as the sum of general state aid, property taxes at the operating rate and corporate personal property replacement taxes. The general state aid pupil count is used as the measure of students. No attempt is made to account for categorical funding programs such as special education, transportation, gifted education or bilingual education. The following tables provide 1998-99 per student revenues and a ten year history of four equity indices by district type. Table I Revenues per Student
The range, in all types of districts, continues to be extreme, although the median is substantially above the $4,225 foundation level mandated in 1998-99. 95/5 Ratio Table II gives the 95/5 Ratio (per student revenue at the 95th percentile divided by the per student revenue at the 5th percentile), a measure of variation in per student revenues, ignoring the highest and lowest (outliers) per student revenues. An index of 1 would indicate no variation in per student revenues between the 5th and 95th percentile. Table II 95/5 Ratio
The report of the Illinois Task Force on School Finance (January 1993) suggested that an acceptable 95/5 ratio is 1.5, meaning that the 95th percentile district would have revenues per student no more than 50% above those of the district at the 5th percentile. If that recommendation is acknowledged, the goal has been achieved in unit districts. Although there is marked improvement in 1998-99, especially in elementary districts, there still needs to be significant improvement in high school districts to reach that goal. Coefficient of Variation Table III gives the coefficient of variation (standard deviation divided by the mean), a measure which expresses the variation as a percentage of the mean. An index of 0 would mean no variation in per student revenues. Table III Coefficient of Variation
The variation in revenues is much smaller in unit districts than in elementary or high school districts. The significant increase (nearly $100 million) in general state aid in 1997-98 caused the indices to drop for all district types, most significantly for units. The increase (nearly $440 million) and the new general state aid formula in 1998-99 vastly improved this index in all types of districts, with the change being most pronounced in elementary districts. Wealth Neutrality Table IV gives wealth neutrality (simple regression coefficient), the extent to which property wealth is a factor in per student revenues. An index of 0 would indicate that the variation in per student revenues was not related to the variation in property wealth per student among the districts. Table IV Wealth Neutrality
The dependence on local property wealth is again much less in unit districts than in either elementary or high school districts, with high school districts the most dependent. In other words, high school districts experience the greatest variation in per student revenues due to variations in local property wealth, while unit districts experience the least. The new formula and increase in general state aid in 1998-99 significantly improved the indices for elementary and unit districts while the high school district index remained fairly constant. McCloone Index Table V gives the McCloone Index (total revenues below the median divided by revenues needed to assure all districts median revenues), a measure of per student revenues in the bottom half of the distribution. This index should be used if the overall philosophy of equity is that high spending districts should be allowed to continue their spending patterns and that revenues for the lowest spending districts should be raised to the median level. Theoretically, this median level of spending should be replaced with an “adequate” level of spending tied to the cost of providing a quality education, which would then enable students to meet or exceed the learning standards. An index of 1 would indicate no variation below the median. Table V McCloone Index
Again, there is less variation below the median in unit districts than in their elementary and high school counterparts. The 1998-99 indices indicate marked improvement in elementary and unit districts and a decline in high school districts. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
