Illinois K-12 Education Funding

The state of Illinois politics has been and appears like it will continue to be in utter disarray for the foreseeable future. As of the publication of this article, and barring a budget miracle by June 30th 2017, Illinois will have been without a budget for almost exactly 2 years. This has resulted in, as of June 10, 2017, over $14.6 billion in unpaid bills. According to Reboot Illinois, this number could rise to approximately $25 billion in FY-2019, if the current path continues. The issues surrounding the continued budget impasse are innumerable and include issues surrounding state pension system reform, higher education funding, medicaid payment backlog, and raising the minimum wage. The continued impasse, and furthermore lack of state funding, has also prompted substantial layoffs across nearly every sector of state government operation.

While the issues noted above are critically important, I specifically want to touch on Illinois K-12 education. On June 30th, 2016 a stop-gap spending bill for K-12 education was passed by the Illinois Congress and signed by Illinois Governor Bruce Rauner. This was a great win for K-12 education, but has since become big problem number 1. The money promised by the state government to school districts across the has not arrived for a majority of school districts. In sum, the issue is while they did pass a k-12 education spending bill, the State simply could not afford to do so. To illustrate this point for fiscal years 2016 and 2017, it promised to pay $1.76 billion each year, but this year has missed three of its four quarterly payments. The total owed to schools is at least $1 billion, according to the comptroller’s office.

This backlog of payments is due most notably to Chicago area schools rather than the more rural south, which rely more heavily on local property tax revenues than than their northern counterparts. However, that is not to say that rural school districts are unaffected by any stretch of the imagination. Intensifying the problem further, a recent federal court case decision obligates the State to prioritize the $2 billion currently owned to medicaid providers, likely pushing obligations such as education further back in line.

Luckily for rural school districts that depend on a combination of local property tax revenue and General State Aid, the State has continued to keep current with its General State Aid payments. However, now comes the biggest potential problem yet for local taxing bodies throughout the State, but most notably the southern half, a proposed property tax freeze.

While the specifics of a property tax freeze may include ways for municipal governments and local taxing bodies to opt out, there is not way to predict exactly what a property tax freeze bill would look like. It is however fairly easy to predict the detrimental impact it would have on school districts who rely heavily on consistent property tax revenue annually. So what exactly would this mean for public schools?

“In one word, death!” exclaims William Phillips, a professor of  Educational Leadership at the University of Illinois Springfield “No new tax money assumes that all a district’s bills are going to stand still… I can’t believe they’re thinking along those lines. It’s really horrible. I don’t know how school districts can survive with the forces aligned against them,” says Phillips.

According to Monticello Community Unit School District 25 Superintendent Vic Zimmerman, “School districts” expenses increase,” he said. “The property tax is a stable revenue source … If they take away our one stable revenue source, how do they want us to continue to function? Tighten our belts? That’s been going on because of proration over the last several years.”

Without a doubt, a property tax freeze of any sort would be detrimental and in many ways unthinkable for school districts who rely heavily on these local revenue streams. A freeze would undoubtedly lead to measures that reduce the teaching force, special education  programs, extra curricular activities, etc. I dare to suggest that in many cases, it would simply be a fight to keep the doors, which may already be a serious problem for many school districts across the State this coming Fall.

What makes the whole issue of a property tax freeze even more difficult to digest, is the simple fact that these savings in property tax, while great for landowners’ and business pocket books, does absolutely nothing in terms of providing the State with more financial stability. Simply stated, these are local funds and the State does not share in these revenues at all. It can be argues that several areas of the State economy would receive a “boost” from a freeze, but at what cost to the local service providers such as municipalities,  police and fire districts, park districts, and of course, school districts.

While impacts of the State budget impasse have been felt by millions of Illinois residents, Illinois Congress and Governor Rauner have so far avoided catastrophe through stop-gap spending bills and last minute deal making. Unfortunately for all of us residents who have so far not felt the direct impacts of the impasse, the time is coming. In sum, our State government is too politically polarized. There is no better time than today to put politics aside and  find places of compromise for the current and future well-being of the State and its residents.

Author: Regional Link

Economic Development Planner