The Future of Illinois Education And What We Can Do About It May 14, 2009 United We Learn Forum

The State of State Funding Governor Quinn’s FY 2010 Budget Priorities Reform – Make state government honest, ethical and transparent Responsibility – Close the budget gap but protect children and families; preserve our commitment to education Recovery – Jump start the economy with a comprehensive jobs plan that includes building new schools; making existing schools more energy efficient; and funding early childhood facilities

The Situation Historic economic challenges Declining revenues Increased spending pressures The Result An $11.6 billion deficit, and a state that can’t pay its bills on time. The Reality Balancing the budget solely through deep cuts will hurt our citizens and further damage our economy. Where We Stand 3 Reform. Responsibility. Recovery.

Revenue / Spending Projections Revenue is expected to decrease by $2.5 billion in fiscal year 2009 (from fiscal year 2008), and is projected to continue this decline through most of fiscal year Increases in Medicaid, social services, employee benefits, and other required costs mean that spending would be $34.3 billion in fiscal year 2010 without reform and cuts. This creates a projected $11.6 billion deficit through fiscal year * Projected Source: Governor’s Office of Management and Budget 4 Reform. Responsibility. Recovery.

5 C ONSEQUENCES OF I NACTION Cuts alone would take the state back to 2004 funding levels: 800,000 people, including children, seniors and people with disabilities would lose health care coverage; Over 34,000 teachers would be laid off, class sizes would increase by 25 percent and per-pupil spending (Foundation Level) would return to $4,810 from $6,089; 35,000 children would lose access to high-quality preschool; More than 10,000 seniors served by homemakers would lose their services; We would be forced to close one of four Illinois veterans’ homes; 17,000 fewer students would receive MAP Grants and 60,000 additional eligible applicants would be put on the waiting list; We would have to lay off nearly 200 state police officers – over five percent of the force – jeopardizing public safety. Reform. Responsibility. Recovery.

Protecting Families Despite these tough economic times, this budget protects Illinois’ children, families and most vulnerable citizens. Health Care Pay our bills on time by reducing the Medicaid payment cycle to 30 days from the current 90+ days. Education Increase funding for P-12 education by $174 million and higher education by $40 million, ensuring that our students are not hurt by the economic crisis. 6 Reform. Responsibility. Recovery.

Investing In Education New Investment Illinois is eligible for $2 billion in federal recovery funds to support elementary, secondary, and higher education and avoid budget cuts below the FY 09 funding levels: $800 million in fiscal year 2009 to support K-12 education; $1.2 billion in fiscal year 2010 to support K-12 and public higher education; This funds an increase of $174 million for K-12 education and $40 million for higher education in FY

Accountability With the increased investments in education comes increased accountability. To qualify for the recovery funds Illinois must meet four assurances: Defined standards and high quality assessments; Pre-K to college and career longitudinal data systems; Teacher effectiveness and distribution of qualified teachers; Support and intervention for the lowest-performing schools.

ARRA for Illinois FY2010 Appropriation: $8.2B

Education Funding Principles in FY 2010 Support the largest number of children in need with the greatest flexibility for districts Align funding with the strategic plan goals of ISBE: demonstrate academic achievement for every student; support highly prepared and effective teachers; and offer a safe and healthy learning environment for all students. Minimize new programs and mandates to conserve scarce resources for all districts

Funding Education in Illinois – FY 2010 The FY 2010 budget for the State Board of Education (ISBE) totals $9.97 billion dollars. This is an increase of 2.3% over the FY 2009 budget. The proposed budget allows for a small increase in the General State Aid (GSA) foundation level The budget includes a $144.7 million increase to fully fund mandated categorical programs (these include special education, transportation and school breakfast/lunch programs) The proposed budget redistributes funds from several single- purpose programs to fund the GSA increase and the mandated programs

Funding Education in Illinois – FY 2010 The largest segment of state aid to elementary and secondary schools is distributed through General State Aid (GSA) The GSA represents 62% of the total funds provided by ISBE to local school districts. GSA distribution is based on formula grants State aid is distributed to districts through one of three methods: the foundation formula; the alternate formula; and the flat grant formula. The formula that is used for each school district is based on the amount of property wealth in each district.

Foundation Level and General State Aid If District Available Local Resources are less than 93% of Foundation Level, the Foundation Formula is used. District receives Foundation Level less Available Local Resources. If District Available Local Resources are less greater than 93% and less than 175% of the Foundation Level, then the Alternate Formula is used. If District Available Local Resources are greater than 175% of Foundation Level, then the Flat Grant of $218 is paid

Funding Education in Illinois – FY 2010 FY 2010 Proposed GSA Budget: $4,704,523,500 (2.5% increase) GSA Proposed Foundation Formula Level: $6,089 Approximately 80% of the Illinois school districts are funded through the Foundation formula (exclusive of alternative or laboratory schools)

GSA Splits by Distribution Type FINAL GSA (in Millions) Pct Districts Pct GSA Pct ADA Pct 675 Foundation % $4, % 1,479, % Alternate % $ % 353, % Flat Grant % $ % 86, % Lab/Alt/Safe % $ % 5, % Total % $4, % 1,925, %

State Funding for Schools based on the Foundation Formula The foundation level for school funding covers only part of the costs of operation for school districts The state modifies the funding level based on poverty levels in the school districts There are provisions that are incorporated into the school funding process to assure school districts that the funding level will not drop below levels and that districts with property tax caps will not be adversely affected by these limits.

State-by-State Comparison of Per Pupil Spending 17 Source: “Public Education Finances 2006,” U.S. Census Bureau, April 2008 Note: Current spending includes expenditures for salaries, employee benefits, purchased professional and technical services, purchased property and other services, and supplies. It also includes payments made by state government on behalf of school systems to state retirement funds and Social Security and transfers made by school systems to their own retirement funds. It does not include debt service, bond retirement, or capital outlays. Per pupil amount is calculated using enrollment statistics, not Average Daily Attendance. The Illinois average spending per pupil of $9,149 (based on the U.S. Census Bureau methodology) is slightly higher than the U.S. average.

Education Funding Advisory Board Education Funding Advisory Board (EFAB) was established in 1997 Primary responsibility of EFAB is to make recommendations to the General Assembly for the foundation funding level and for the supplemental GSA grants to school districts with high concentrations of children in poverty Governor Quinn appointed five new members of EFAB on May 1st

Foundation Level Funding Over Time Note: The EFAB is the Education Funding Advisory Board, which is appointed to identify and recommend the foundation level to the General Assembly in January of odd- numbered years. The foundation level is supposed to reflect the per pupil cost of providing a basic educational program in a high-performing, efficient school The EFAB has not met since

State Funding in Education – Beyond 2010 Reform – how does the state support reform efforts in Education and how do we identify best practices; how do we reform our current practices for funding schools Recovery – how do we bring the state to the right level of funding for Education and assure equity Responsibility – how do we get all citizens to recognize the responsibility that we all have to assure quality education at all levels