SENATE BILL 1 THE EVIDENCE-BASED MODEL FOR SCHOOL FUNDING - PowerPoint Presentation

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SENATE BILL 1THE EVIDENCE-BASED MODEL FOR SCHOOL FUNDING

Ensuring equitable funding to help all students succeed.

Yesterday, Governor issued an Amendatory Veto of SB1

  SB1 is the evidence-based model and was outcome of years of work, starting with Vision 20/20

Governor’s AV made significant changes to SB1, many of which undermine key parts of the evidence-based model

Today’s webinar we will take you through the provisions of SB1, what the Governor changed, and procedurally what happens next

OVERVIEW

The new formula ties school funding to those

evidence-based best practices the research shows enhance student achievement in the classroom.   

Each school district is treated individually, with an Adequacy Target based on the needs of its student body. The greater the student need, the higher the Adequacy Target

.

New dollars go to the neediest districts first—those furthest from their Adequacy Target.  This will close the gaps in funding that exist in our current system.

SB1

treats students in Chicago the same way

it treats students in every other school district in the state by getting rid of Block Grants and reconciling pension payments.

No district loses money

. No exceptions. The starting point is the amount of funding the district has this year.  All new state funding going forward is on top of what districts currently receive. Provides a long-term fix for our state’s worst-in-the-nation school funding formula.

HIGHLIGHTS OF SB1

New

funding is required to get to adequacyTherefore, no district should lose funding

80% of Districts

Are

Below

Adequacy…

Changes

Adequacy Target

Removes protection

for normal pension cost shift

Caps regionalization factor

Freezes

costs at

2017 levels

Modifies

Local ContributionSkews calculation of local wealth, penalizing TIF and PTELL districtsAffects Base Funding Minimum/Hold HarmlessMoves from per district hold harmless to per pupil

in 2020-2021 school year

Reduces

Equity in Distribution

of Funding

Removes

minimum

funding level which drives resources to neediest districts in low state funding yearsNegatively Impacts Students in Chicago Public SchoolsCuts $200 million in existing funding from Chicago Public Schools Removes CPS unfunded liability credit from Local Capacity calculationPays CPS Normal Pension Costs outside school funding formula

AMENDATORY

VETO UNDERMINES EVIDENCE-BASED MODEL

IN SB1

LOCAL CAPACITY

How much can the district contribute?

BASE FUNDING MINIMUM

How much does the state currently contribute?

3. DISTRIBUTION FORMULA

How is new money from the state

distributed?

ADEQUACY TARGET

How much does providing high quality education cost?

GAP TO ADEQUACY

2. PERCENT OF ADEQUACY

How well-funded is the district?

100% of Adequacy Target

District 1

District 2

District 3

HOW DOES SB1 WORK?

Overview Of The Model

Calculate Cost of 27 essential elements

Adjust salary-based elements for regional wage differences

Apply essential elements to individual districts based on demographics

Enrollment

Low-Income

Special Needs

English Learners

IEP

IEP

DISTRICT ADEQUACY TARGET

STEP 1

STEP 2

=

STEP 3

Pension

Costs Shift Protection. SB1

provides security that

the

Adequacy Target will reflect normal pension costs as districts become responsible for

them

Costs

Adjust

Over Time.

Adjusts salaries to keep pace with inflation so funding reflects reality for districts. Adjusts for Regional

Wage Differences.

Includes a floor so that downstate districts can compete for and retain high quality educators.

No

Protection for Pension Cost Shift.

No accommodation

in

Adequacy Target for future normal pension cost shifts to school districtsCosts Frozen in Time. Does not adjust salaries for inflation. Does not create an accurate accounting of cost of Adequacy.Caps regionalization. This would hurt districts in high cost areas by artificially deflating salary numbers.

SCHOOL FUNDING COMPONENTS

Calculating Adequacy

SB1

GOVERNOR’S AV

To calculate how much a community can contribute to funding from local property taxes the model uses a

Local Capacity Target (LCT)

.

The LCT is the dollar amount a district would ideally contribute towards its Adequacy Target, based on a comparison of all districts in the state.

Districts With Higher Property Wealth Are Expected To Contribute More

Local Capacity Reflects Local Resources That

Support Education

LOCAL CAPACITY

9

Reflects

Local Funds Districts Can Access. PTELL

/

Tax Caps limit

local funds

districts

can raise. SB1

uses

only the

taxes districts can access.All Property Wealth is Included, Even if Districts Can’t

Access It. Taxes on a district’s full EAV are counted,

even

if the

district

doesn’t receive those dollars because of TIFs, PTELL or tax caps

.

SCHOOL FUNDING COMPONENTS

Local Capacity CalculationSB1GOVERNOR’S AV

Every district keeps the amount of state funding it received in FY17.

This is the initial Base Funding Minimum.Going forward, no district will receive less state funding than it received the prior year.

Each new dollar a district receives from the state in Year 1 becomes a part of its Base Funding Minimum in Year 2 and so on.

If the state does not appropriate enough to cover the cost of the Base Funding Minimum, then funds are first removed from the Base Funding Minimum from the most adequately funded districts.  If that still isn’t enough, then further reductions are on a per pupil basis for all districts.

The Base Funding Minimum Ensures

No District Loses Money

BASE FUNDING MINIMUM

11

District

Hold Harmless. Districts are held harmless through the Base Funding Minimum (BFM).

Funding will not go down year-over-year unless the appropriation is not enough to cover the BFM.

Switch

to Per Pupil Hold Harmless.

Districts

are held harmless through the BFM until the 2019-2020

school year

.

In 2020-2021 school year, shifts to per pupil hold harmless. Districts with dropping enrollment will lose funding, even if they are inadequately funded

SCHOOL FUNDING COMPONENTS

Base

Funding Minimum:

Hold

Harmless

SB1

GOVERNOR’S AV

More Funding for Neediest Districts. Automatically shifts more money to Tier 1 (neediest) districts if the state doesn’t appropriate above a minimum funding level.

Ensures the most equitable distribution of funds.

Eliminate Protections for Neediest Districts. Allows more funding to flow to less needy districts (Tier 2) if the state doesn’t provide minimum funding

SCHOOL FUNDING COMPONENTS

Minimum Funding Level: Equity for Neediest Districts

SB1

GOVERNOR’S AV

14

$896M in Normal Cost

$2.62B in Unfunded Liability$12M inNormal Cost

Illinois

taxpayers

pay

normal costs of pensions for all districts except Chicago Public Schools, but CPS taxpayers contribute to TRS funds that go to the rest of the state

$221M under SB1

Sunsets CPS

Block Grants.

Requires CPS

to submit claims like all other districts. Ensures no district loses funding by incorporating portion of block grant into the Base Funding Minimum.Recognizes CPS

has to pay unfunded liability

.

Local dollars

that

go to pensions can’t also go to classrooms. SB1 subtracts this amount from CPS’ Local Capacity.CPS Receives Normal Cost. It is included in the Base Funding Minimum.

Cuts $203 million

in

existing funding from

CPS

.

Redistributes this funding to other districts

.

Removes the credit for CPS’ unfunded liability

from the calculation of their Adjusted Local Capacity. CPS will continue to divert classroom dollars to pensions.CPS Receives Normal Cost. It is funded through a continuing appropriation like TRS. Costs $221M above what is included in the budgetSCHOOL FUNDING COMPONENTS

CPS Components

SB1

GOVERNOR’S AV

WHAT

HAPPENS NEXT

Recognizes individual student needs

Accounts for differences in local resourcesCloses funding gaps & keeps them closed

Provides a stable, sustainable system that gets all districts to adequacy over time.#

norednumbers

SB1 ALIGNS WITH THE FOLLOWING CORE

VALUES.

THE GOVERNOR’S AV DOES NOT.

SB1 meets these four requirements for an equitable funding system, and does so while ensuring that no district loses funding.