The governor’s Aug. 1 revisions to the state’s education funding bill contained some good news for cash-strapped residents in Springfield and other downstate communities: A plan to end annual Chicago Public Schools bailouts.
But if the Illinois House of Representatives overrides Gov. Bruce Rauner’s changes to the bill, suburban and downstate districts will be forced to forego hundreds of millions of dollars that will instead subsidize CPS.
Rauner made the funding plan fairer by using his amendatory veto power to address several parts of Senate Bill 1. Under the revised funding plan, an analysis by the Illinois State Board of Education shows nearly 98 percent of Illinois school districts receive more money than they would have under SB 1. The governor made this possible by removing subsidies that heavily or exclusively favor CPS at the expense of other districts.
Over the past decade and a half, the state has given CPS billions in extra state funding — money that should have been distributed evenly statewide. Yet due to its own mismanagement, CPS is junk-rated, its finances are in disarray, and its pensions are eroding.
The governor’s changes make education funding fairer by eliminating:
* An annual $200 million “block grant” carved out especially for CPS years ago.
* Special treatment of CPS in the new formula — tied to CPS’ pension debt — that no other district received.
* Special subsidies for districts in property tax-capped jurisdictions using the Property Tax Extension Limitation Law, or PTELL, and in economic development zones called tax increment financing, or TIF, districts. Those subsidies have disproportionately benefited CPS over the years.
Districts like Springfield School District 186 should never have been forced to bail out CPS in the first place.
Springfield spending per student has stagnated the last five years. Meanwhile, CPS’ per-student spending grew nearly $1,800. And Chicago Public Schools teachers are the highest paid in the nation among the nation’s largest school districts.
CPS has benefited disproportionately from subsidies for school districts located in property tax-capped areas or in special economic zones. These districts are allowed to under-report their property wealth to make up for the property they can’t tax. The poorer a district looks, the more state aid it gets.
But communities that choose to use property taxes to create development zones instead of supporting education shouldn’t get additional state aid at the expense of other taxpayers. And communities that want to keep their property taxes capped shouldn’t get subsidies that force districts without tax caps to foot the bill.
This year alone, CPS will be eligible to hide from its state aid request $6.6 billion in property wealth tied up in economic development zones. That will make CPS look poorer than it is and result in the district receiving more state funding.
In addition, the district received an extra $40 million last year due to property tax cap subsidies. In total, CPS has collected nearly $2.5 billion in subsidies since 2009. By comparison, all other districts in the state combined received a total of $1.6 billion.
That’s fundamentally unfair to school districts that don’t receive any such subsidies. The subsidies drain money from the state’s funding for education, leaving those districts with less.
Rauner’s amendatory veto creates a more level playing field for all Illinois districts by changing how new state dollars for education will be distributed. Under the veto, no district will get less funding next year than it received from the state in 2017. And by eliminating unfair subsidies, almost every district will receive more state aid in 2018.
All school districts in the Springfield area benefit from the governor’s changes. This year, the eight districts in and around Springfield will collectively receive $2.7 million more in funding under the governor’s veto compared with what they would get under SB 1, the ISBE analysis showed.
And with the hundreds of millions in new money promised in 2018, Illinois’ neediest districts — such as Rockford, Waukegan, Cicero and others — also come out ahead under the governor’s veto.
— Ted Dabrowski is vice president of policy at the Illinois Policy Institute.