Steve's Blog

There’s some misinformation flying around about the Governor’s amendatory veto of the school funding bill (SB 1) which needs to be addressed.

The thing that’s got my attention is the discussion surrounding the calculation of the “hold harmless” provision. The Civic Federation, whose work I generally respect, said this:

“(T)he veto sunsets the hold-harmless provisions of the bill after the first two years, and replaces them with an alternate hold-harmless formula based on a three-year rolling average of student enrollment. Districts that lose student population between the 2016-2017 school year and the 2019-2020 school year could lose funding under the new formula. This provision could affect a large number of districts; 527 of them lost population between 2015 and 2016.”

What the Civic Federation says about the adjustment from a “per district” to a “per pupil” isn’t wrong, but inasmuch as there’s so much heat being generated by the veto, it should not have implied that the shift sprang from the mind of the Illinois Policy Institute, because it didn’t.

The shift was provided for in the February 1, 2017 report issued by the Illinois School Funding Reform Commission and contained in HB 2808, which was the original piece of legislation in which the evidence-based model was proposed. From the report:

“To protect the per pupil current funding level for each district in any formula transition, the hold harmless will be calculated on a per pupil basis using a three-year average of student count. The use of enrollment versus average daily attendance (ADA) should be revisited by the Commission for the Oversight and Implementation of the School Funding Formula as accurate and reliable data become available and upon analysis of the impact of the new formula.” (emphasis mine)

If schools are losing enrollment, their funding should be adjusted to reflect the decline. When HB 2808 was changed to add the sweeteners for Chicago, the per pupil allocation was removed in exchange for a per district allocation. The Governor’s veto put it back. Ironically, there’s a story in today’s Tribune informing us that CPS is making staffing adjustments for the very same reason:

“Principals were nonetheless expected to move forward with staff adjustments. The district said 356 teachers and 600 support staff would be let go as a result of ‘enrollment changes, program adjustments and/or changes in students’ academic needs’… Last year, CPS laid off more than 500 teachers and another 500 school-based staff members prior to the beginning of the year. The district then let another 250 teachers and staff members go after the year began, due to a steeper-than-expected drop in enrollment.”

Pot, meet kettle.

As I mentioned in my last post, the Governor’s veto removed a provision in SB 1 that said that no part of the current EAV of real property located in a TIF district which is attributable to an increase above the initial EAV of such property would be calculated in the district’s EAV for calculating the Local Capacity Target. The rationale behind that move was that to retain such an adjustment would allow school districts to under-report current property wealth as part of their “local capacity target”, thus moving a district into a lower Tier than would be the case if the district’s actual EAV (and “real” tax receipts) was used as the measuring stick.

As of this writing, the Illinois State Board of Education (ISBE) has yet to publish its calculation of how this change affects districts which have TIF districts within their boundaries. It’s quite possible that such districts will receive less money than they would without the adjustment.

I’d be perfectly happy to cut this baby in half and provide for some means by which local capacity could be adjusted to reflect a TIF’s existence without making a wholesale adjustment for the entire difference in EAV. But this is what you get when you hold onto a bill for 2 months and send it on when there’s little or no time to make clear and sensible adjustments, forcing you to make changes with a meat axe instead of a scalpel.

And, in a bow to the cynicism that greets every move coming out of Springfield, I’ll throw this out: If the TIF adjustment wasn’t made by the veto, how soon would you see school districts setting up TIF districts coterminous with their own borders simply for the purpose of moving up the priority list for funding? Impossible, you say? Remember, this is the same state that elected Rod Blagojevich as governor. Twice.

Finally, the amendatory veto removes the adjustments for PTELL from the determination of local capacity. This again has the effect of moving a district up or down in the pecking order for Tier 1 or Tier 2 distribution.

Again I’ll say that rather than making an issue out of this within a school funding bill, maybe it’s time to revisit the whole issue of PTELL itself, which was originally enacted to stop the rise of property taxes during those halcyon days of the late ‘90’s and early ‘00’s when home values were going up faster than a Saturn V. Those days are gone for good.

The hold-harmless provisions ensure that school districts that received PTELL adjustments in FY2017 and school districts with TIFs will retain that funding for FY2018 (“held harmless”) However, school districts using PTELL EAV and with TIFs could be affected with regard to what portion of the $350 million in additional funding for FY2018 and any additional funding going forward they will receive.

So if you want my advice (and even if you don’t), here it is: Stand down with the rhetoric, provide funding equal to last year’s level (which I’m confident can be done without passage of the evidence based model), then let’s get back to work and fix this thing.