Moving Forward: Illinois' Evidence Based School Funding Formula Can Reverse Decades of Inequity Created by the Foundation Formula It Replaced

After just one year of implementation, Illinois’ new school funding formula – the Evidence Based Funding for Student Success Act, or EBF – holds out the promise of closing Illinois’ drastic funding and achievement gaps both between schools in property-rich and property-poor districts, as well as between schools in predominantly white communities and schools that serve predominantly students of color. The EBF accomplishes this by focusing new K-12 funding on those districts which are furthest away from having the resources to fund their respective “Adequacy Targets” – which is the amount the research indicates is required to provide the level of education the students they serve need to succeed academically.

The old formula it replaced was based on a one-size-fits-all “Foundation Level” of per-pupil funding that was both inadequate in amount and inequitable in distribution. Indeed, the state’s historic investment in K-12 has been so inadequate that local property tax revenue became the primary method of funding education. This structurally disadvantaged school districts with lower property wealth so materially that the old formula resulted in Illinois having among the most regressive education funding systems in the country. In fact, districts serving the lowest concentration of low-income students not only had the most per-pupil funding, but raised more revenue per pupil through local property taxes alone than all other districts were able to raise from all federal, state, and local sources combined. This is contrary to the research, which shows that low-income students need greater levels of investment than their non-low-income peers to achieve academically.

The EBF is well-designed to counter that historic inequity. For instance, during the 2017-18 school year, the EBF’s first year, $366 million in new school funding was distributed as follows:

• Over 89 percent, or $326 million, went to the “Tier I” school districts, which were furthest from having adequate funding;
• $229 million, or 63 percent of new K-12 funding, went to school districts serving a student population at least 59 percent low-income, and $321 million, or 88 percent, went to districts with a student body that was at least 40 percent low-income.
• $279 million, or 76 percent of the new 2017-18 funding, went to districts that collectively educate 84 percent of all black students, and 75 percent of all Latino students, in Illinois.

In other words, in its first year, the EBF has begun to reverse Illinois’ ignoble tradition of inequitably funding public education. However, there is much more work to be done. As of Fiscal Year 2018, the vast majority of school districts in Illinois—707 districts, or 83 percent—were below their respective Adequacy Targets. All told, the Illinois State Board of Education found that at the beginning of Fiscal Year 2018, K-12 funding in Illinois was some $7.37 billion less than what the evidence indicated was needed to fund the Adequacy Target for every school district.