Cynthia Heidorn, Assistant Superintendent for Finance/Operations, Glen Ellyn Elementary District #41.

Mr. Chairman and Members of the Board,

Thank you for the opportunity to speak directly to our concerns about state funding of education in Illinois.

We applaud the change to block grants and per pupil allocations. This equitably spreads the support for students and programs to all students and provides assistance to all communities. The move to increase funding in categorical rather than state aid has benefited our district. Our state funding has increased from 7% to 12% of our budget. We are grateful for this support. As a primarily residential community our homeowners bear 85% of the cost of our educational program. We appreciate the relief that the categorical programs provide.

Special appropriations have been used to repair roofs and to install a computer lab. These funds make a critical difference.

The Technology Revolving Loan program enabled us to equip our middle school with a computer for each classroom at affordable interest rates.

Our eligibility for the Textbook Loan program gives us the ability to replace and update textbooks. It is an important contribution to the classroom.

In the area of local funding, we accept that the property Tax Limitation Act is a fact of life. However, there are consequences that need to be addressed by the State:

• The lag in the CPI during times of inflation is a concern. we are offering programs and purchasing services (including fuel and gas) in 2000 with revenue based in 1998 dollars.
• The referendum questions required are complex and need to be simplified. The law requires that the referendum question state the current legal rate and extension as well as the requested legal rate and its extension. Nowhere does it allow a statement of the actual rate and the amount extended. The statute presumes that the Board is levying at its legal rate when it asks for a rate increase. This is not the case for tax capped districts.  As a tax capped district, we have lost access to approximately $0.05 of tax rate each year as our EAV has grown at a faster rate than the CPI. For example with a referendum question to access our voter approved maximum rate, we would add the difference between our actual rate ($1.87) and the legal rate ($2.35) to the legal rate to be able to access our current legal rate ($0.48 + $2.35 @ $2.83). The current question is extremely confusing and misleading to the voters. We believe that the voters are entitled to referendum questions that are simple and clear.
• A related concern is the change in the election laws that limit our access to our voters and to referendum funds. When we pass a referendum in the spring, the date of the election is after the County Clerk closes the books for issuing tax bills. The funds will not be available to us for one year following the referendum, unless we levy for the referendum prior to the Board voting on the referendum question The timing is out of alignment. If the Board levies for the referendum without having determined the question, the levy and the subsequent truth in taxation notices may be out of proportion to the actual request. This could also confuse the voters. If the Board does not levy for the possible referendum, the district will not receive the funds from the April 2001 election until June and September 2002. Voters will expect the additional funds or services to be in place for the next school year.
• There is another referendum question that requests a one time exemption to the CPI for tax capped districts. This is an ideal and simple question. However, its execution is difficult because the Board cannot place a referendum question on the ballot without knowing the amount of the CPI from which it wants the levy to be exempted. The result is this question m only be asked in November. The new election law eliminated the November election in alternate years. Thus postponing our access to this simpler question to 2002 and the receipt of funds to 2003.
• The Property Tax limitation exemption for new construction provides only 25% of our operating cost per pupil for our new students. This is an insufficient base but into the formula. The largest increase in our enrollment comes from generation turnover. The tax cap does not provide for enrollment growth from generation turnover when enrollment growth is greater than the CPI from year preceding the levy.
• Please support continuation of the supplemental and hold harmless grants that protect tax capped districts caught by the 'Double Whammy" or whose tax rates fall below the minimum required to receive State Aid as a result of the cap. These are examples of unintended consequences.

The second area of concern is special education reimbursement.  Statements that the State is fully funding special education are not accurate. The General Assembly is funding formulas that have not kept pace with inflation:

• The reimbursement formula yields a maximum of $2,000 for each special education student when a district spends more than one and half times it operating cost per pupil. This is inadequate. Our special education expenses range from $7,384 to $41,255 per student. The average special education student in our district costs taxpayers $11,078 compared to our operating cost per pupil of $6,451. The record keeping is extraordinary. We spend three full weeks each summer completing state required reports on 112 children whose actual cost is $1,240,714 to receive a projected reimbursement of $139,123. This is 11% of the cost of special education. Countless hours are spent maintaining FACTs reports and other data to be able to claim these students. Personnel are required both at the District and within our cooperative just to maintain records of service and expenditures. This administrative time and money could be better spent delivering services to students. Additionally, multiple compliance audits from the ROE, the State, the Federal government and Board auditors cost time and money. The General State Aid audit of attendance for $850,000 took as long as the entire audit of our $23,000,000 budget. Only a $323 adjustment was made.
• The reimbursement for special education personnel has not changed in at least ten years. $8,000 does not sufficiently defray the costs of additional teacher salaries for the small class sizes required for special education. $2,500 for special education aides that cost on average $20,000 including benefits is only 8% of the cost.

In summary, school finance is complicated by its intersection with other laws and regulations. At face value a particular funding program may appear to provide a solution to the competing needs. However, we caution you to look carefully for the real impact of implementation of any changes in funding or formulas. Regulations to implement complex laws/formulas can be burdensome and costly.

On behalf of the children we serve, thank you for your efforts to examine issues of school funding in Illinois.  We look forward to you recommendations.