Issue Brief: Illinois' School Funding Formula and General State Aid

There are four primary approaches to funding K-12 public education. These range from full state funding to flat grants. Illinois has selected a modified Foundation Level approach as its primary basis for school funding. The Illinois Foundation Level system has two distinct steps. First, a minimum guaranteed amount of funding per student that should be available to all schools – literally, the “Foundation Level”–is identified. Second, the Illinois State Board of Education then uses a formula (the General State Aid formula or “GSA”) to determine how much of the Foundation Level will be covered by the state, leaving the remainder to be covered by local property tax resources. The vast majority of school districts in Illinois have their state education funding determined under the preceding “Foundation Formula” approach.

A small percentage of Illinois school districts in affluent communities make such significant contributions to per pupil spending that they would receive no funding from the state under the GSA Foundation Level formula. In this case, state contributions to local spending are based on either the “Alternative Formula” or “Flat Grant Formula.” The policy concept behind using Alternative and Flat grants in such cases is that the state should be contributing to the education of every child, even in those instances where local resources provide more funds than the Foundation Level minimum. 

This Brief provides an overview on how K-12 public education is funded in Illinois.