General State Aid Recommendations
A Report to the Illinois General Assembly
The Illinois Education Funding Advisory Board was created by Public Act 90-548 in December of 1997. The five-member Board, along with 12 ex-officio members, was seated by Governor Ryan in June 2000.
Education Funding Advisory Board Members
Robert Leininger, Chair
The Work of the Board
The Board held its first meeting for organizational and educational purposes on July 28, 2000. A second educational meeting was held on August 25. The immediate charge of the Board is to recommend to the General Assembly foundation level and poverty grant amounts for FY2002. To that end the Board scheduled 3 public hearings to receive input from education, business and community leaders. These hearings were held in Carbondale on September 7th, Hillside on September 28th and Springfield on October 4th. In late September the Board started the process of contracting a study to determine a formula foundation level and poverty grant amounts. A two-part Request for Proposal (RFP) was released in mid-October. Part I of the RFP requested short-term recommendations for the foundation level and poverty grant amounts. Part II of the RFP requested a more detailed research-oriented study which would produce methodologies which could be used to determine foundation level and poverty grant amounts for FY 2003 and beyond. Subsequent meetings were held on November 6 and 8 to review and discuss the proposals received in response to the RFP. The Board reviewed summaries of the hearings and received staff recommendations on November 17. A report from Dr. Richard Wiggall from Illinois State University, the successful bidder for Part I of the RFP, was presented to the Board on December 12. Also on December 12, the Board heard preliminary results from an independent group, Network 21, working on similar projects. They also further reviewed proposals for Part II of the RFP. The successful bidder for Part II was Augenblick and Myers of Denver, Colorado. The study is scheduled to be completed by June 11, 2001. The final agenda item on December 12 was the drafting of preliminary recommendations for the General Assembly. Chairman Leininger shared these recommendations with the Illinois State Board of Education on December 13. The final report was approved on December 28.
In order to meet its statutory timeline of January 2001, the Board respectfully submits the following recommendations to the General Assembly. These recommendations are based on written and oral testimony received at the public hearings, the Part I report furnished by Illinois State University, staff recommendations and the individual study of Board members. All recommendations should take effect July 1, 2001 in order to provide school districts with planning opportunities.
1) While the Board would prefer a General State Aid foundation level increase commensurate with the calendar year 2000 Consumer Price Index (CPI), the recommendation is that the increase in combined General State Aid and Hold Harmless appropriations for FY2002 be no less than $135 Million which would yield a foundation level of no less than $4,560.
2) It is recommended that the minimum threshold for access to the poverty grant be lowered to 15% and the dollar amounts be dropped in favor of percentages of the foundation level.
The poverty formula for FY2001 contains dollar amounts for each low income student. The poverty formula for FY2001 is given below.
If DCR < .20 then Grant = 0
If .20 <= DCR < .35 then Grant = $800 x Low Income Count
If .35 <= DCR < .50 then Grant = $1,273 x Low Income Count
If .50 <= DCR < .60 then Grant = $1,640 x Low Income Count
If DCR >= .60 then Grant = $2,050 x Low Income Count
Where DCR = Low Income Count / Average Daily Attendance
Under this recommendation, the poverty formula for FY2002 would change to:
If DCR < .15 then Grant = 0
If .15 <= DCR < .20 then Grant = .11 x Foundation Level x Low Income Count
If .20 <= DCR < .35 then Grant = .20 x Foundation Level x Low Income Count
If .35 <= DCR < .50 then Grant = .29 x Foundation Level x Low Income Count
If .50 <= DCR < .60 then Grant = .38 x Foundation Level x Low Income Count
If DCR >= .60 then Grant = .47 x Foundation Level x Low Income Count
Where DCR = Low Income Count / Average Daily Attendance
The discrete categories of the grant are maintained. The amounts are tied to the foundation level, removing the necessity to set the grant amounts annually. The access threshold is also lowered providing poverty grant funding to more districts. It is further anticipated that further lowering of the minimum threshold would occur in subsequent years.
There was much discussion concerning the measure of students from low-income families. The measure currently used is the 1990 Census. Although the Board believes a more timely and accurate measure should be used, the recommendation is to continue to use the 1990 Census for FY2002. The Board is exploring alternative poverty measures and expects to recommend substitute methodologies in its next report.
In addition, it was suggested that poverty grant funds be targeted to serve the needs of at-risk students. Superintendent of Education McGee agreed to explore that avenue with the Illinois State Board of Education.
3) The pupil count in the formula, currently the prior year average daily attendance (ADA) should be changed for FY 2002 and thereafter to the greater of the prior year ADA or the most recent three-year average ADA. The ADA used to calculate the poverty grant percentage should remain the prior year ADA.
The hold harmless was necessary when the general state aid formula changed in FY1999 in order to give school districts receiving a lesser amount of state aid a chance to adjust to new funding levels. Districts have since become dependent on this funding source. The Board believes It should not be permanent. Further recommendations regarding the Hold Harmless will be forthcoming.
5) The continuing appropriation for General State Aid should be reenacted with no sunset provision. The continuing appropriation for Hold Harmless should be continued through FY2002.
The continuing appropriation law is looked upon favorably by school districts, giving them confidence that funds will be available regardless of the appropriation.
6) At the request of the Governor and State Superintendent of Education, it is also recommended that additional funds be appropriated to the Early Childhood Block Grant. The Board supports the Illinois State Board of Education and its continuing efforts to expand early childhood education.
The recommendations for FY 2002, while not solving the funding problems of all school districts in Illinois, will provide significant increases in General State Aid funding and begin to move districts away from reliance on hold harmless funding.
The methodologies provided in the Part II study referenced above will provide the basis of future recommendations regarding formula foundation levels and poverty grant funding. It is anticipated that an interim report will be issued in the fall of 2001, which would provide recommendations for FY2003.
The Board looks forward to working with the Governor and General Assembly in the future. In addition to addressing General State Aid related issues such as a foundation level methodology based on high performing low spending schools, the count of children from low-income families, a regional cost adjustment and the hold harmless, the Board intends to address, among other topics, categorical funding, property assessment, technology, budgetary flexibility, reliance on property tax to fund elementary and secondary education and the state’s share of education funding.