School Funding – Illinois

Chicago and downstate pols having been fighting over state money ever since the Windy City rose from the swamps along Lake Michigan.

So regional funding squabbles are nothing new in the Illinois General Assembly.

But to hear House Speaker Mike Madigan talk, one might think a bunch of downstate yokels are chowing down on feast and expecting Chicago to pick up the tab.

The Chicago Democrat says that downstate and suburban schools districts are getting a “free lunch” when it comes to state funding of pensions.

And to a certain extent he is right.

Illinois taxpayers contribute $67 more per pupil to the Illinois Teachers’ Retirement System, which serves downstate and suburban school districts, than to the Chicago Teachers’ Pension Fund, according to a study recently completed by the Illinois Senate GOP caucus.

But there’s more to the story. The same study found that Chicago was receiving $2,223 more in state money per pupil for educating children than the school districts outside of the city.

The study’s authors came up with that number by dividing the amount of state aid going to Chicago by the number of students in the district. They then took the aggregate amount of state money going to the other 862 Illinois school districts and divided by the number of pupils in those districts. The downstate and suburban number was subtracted from the Chicago number.

That’s how they found the $2,223 funding disparity.

This fact has been obscured by Illinois’ extraordinarily complex education funding system that treats school districts across the Land of Lincoln differently. Six major types of state grants are used to help fund the 863 school districts scattered across Illinois.

And that complex formula can have unfortunate outcomes.

For example, a school district educating a child living in poverty in downstate Edwardsville receives only 15 percent of the state poverty grant money that a Chicago student living under comparable circumstances would, the study found.

Perhaps not surprisingly, legislative Republicans are calling this disparity “Chicago’s Free Lunch.”

It’s high time that Illinois had a comprehensive look at how it spends its education dollars and what constitutes good public policy. What’s best for students, educators and taxpayers?

To be sure, Chicago Public Schools face extraordinary challenges because of the high concentrations of poverty within the city. Still, the amount of state money pouring in per pupil outpaces other school districts across Illinois to a head-scratching degree.

On the other hand, Madigan is correct in calling for local school districts to take greater responsibility for funding educator retirements.

When a school district opts to give a superintendent – or a group of teachers – a raise that ultimately boosts pension costs, this translates into an unfunded mandate from a local school district to all state taxpayers.

Instead Illinois should step away from the defined benefit pension system altogether and allow individual school districts to make contributions to 401(k)-type retirement plans for its employees.

Senate Republican Leader Christine Radogno said she doesn’t want the education funding issue to be addressed this year because it would divert attention away from the critical task of pension reform. The reason Republicans are bringing it up, she said, is to add greater context to the pension debate.

“I’m a social worker by training,” she told me Monday. “I understand that it takes more resources to educate a child living in poverty. But that’s not the only reason Chicago gets more. For example, state special education funding is based on 1995 population distributions even though Chicago’s numbers have gone down since then. That’s not fair to suburban and downstate kids.”

Radogno said she is bringing up the issue of education funding inequities now to shed more light on the Madigan’s comments.

“I was very startled by the tone of Madigan’s comments,” she said. “It wasn’t a prudent or helpful thing for him to say. I’m not trying to start a regional fight, but we need to have a better idea where money is going.”

Scott Reeder
Veteran Statehouse Reporter and Journalist in Residence
Illinois Policy Institute
I can be reached at: 
[email protected]

The purpose of this free report is to provide analysis, context and insight into public policy issues in Illinois today. 

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