EXECUTIVE SUMMARY
EDUCATION FUNDING ADVISORY BOARD
SCHOOL FUNDING SURVEY

The purpose of this report is to provide background information about the school funding survey and highlights of the results. A full report containing all of the information is available.

The Education Funding Advisory Board (EFAB) decided to solicit school funding information from various educational organizations in the state. A school funding survey was created and mailed to 72 organizations. The survey consisted of various types of questions: yes/no, checklists of options and narrative. The survey covered many areas of school funding including equity, adequacy, effectiveness, state aid formula issues, property tax issues and other funding issues. Following is an abbreviated timetable of events:

  • June 18th - mailed surveys
  • September 7th - mailed follow-up surveys
  • September 19th - 36.1% (26) responses received by the Illinois State Board of Education (ISBE)
  • September 24th - preliminary report presented to the EFAB
  • September 25th & 26th - made follow-up phone calls
  • September 26th - revised the original mailing list to 67 organizations
  • October 15th - 38 (56.7%) organizations responded by final deadline

Not all organizations answered every question on the survey. The percentages calculated below are based on the number of responses for a specific question, not on the total number of surveys received. Following are some major points obtained from the survey (the percentage of yes responses and the number of responses are in parentheses):

  • Illinois relies too heavily on property taxes to fund education (100% of 34)
  • Equity is important (97.3% of 37)
  • Separate poverty grant should continue (97.0% of 33)
  • Equity should be a priority in state funding (94.4% of 36)
  • Some levies should be exempt from tax caps (87.1% of 31)
  • Some purposes (for levying taxes) should be consolidated for flexibility (81.8% of 33)
  • Number of categorical programs should be reduced (72.4% of 29)
  • Foundation level should be regionally cost adjusted (71.9% of 32)
  • Large block grants instead of individual categorical programs (70.0% of 30)
  • The issue of district reorganization should be addressed (68.9% of 32)
  • Grade level weightings included in the formula (67.6% of 34)
  • Enrollment-based formula instead of attendance (64.5% of 31)
  • CPPRT distribution should be revised (64.3% of 28)
  • Funding should be tied to "effectiveness" (63.9% of 36)
  • Method of teacher compensation should be changed (61.3% of 31)
  • Weight the formula pupil count for low income students rather than a separate grant (55.2% of 29)

There were two additional questions that dealt with categorical funding that were not supported by the majority of organizations. The first question asked if categorical funding should be equalized and 50% of 26 organizations responded no. The second question dealt with integrating categorical funding with the state aid formula and 55% of 29 organizations responded no. Many of the highlights above had follow-up questions to yes responses. The rest of this report will concentrate on the results of those follow-up questions.

All organizations that answered the question agreed that Illinois is too reliant on property taxes. When asked the follow-up questions on possible solutions, the answers were varied. For the most part, organizations felt there should be a partial abatement (86%) instead of a full abatement. When given the choice of which sectors should be abated (residential, farm, commercial, or industrial), the majority of organizations chose residential (66%) and industrial (50%). Sixty-three percent of the organizations thought that property taxes should be reduced for "all purposes". When asked about where the local property tax replacement revenues should come from the responses were all possible combinations of state income tax, state sales tax, local income tax and a variety of "others". The majority (66%) of responses at least in part included the state income tax. The last of the follow-up questions dealt with how the local property tax replacement revenues should be distributed. Approximately 52% of the organizations said the money should be distributed through a state equalization formula.

Although more than 97% of the organizations said that equity is important and that it should be a priority in state policy, there was no consensus on what "equity" means. Common terms used included fair, equal, free of bias and same access. The same can be said for the questions on adequacy and effectiveness, but to a lesser degree.

For the organizations that thought the separate poverty grant should continue, there was a follow-up question regarding which poverty indicator should be used for the calculation of the grant. There were a variety of indicators to choose from including free lunch, reduced lunch, Census update, Food Stamps, Medicaid/Kid Care, TANF and other. Half of the organizations combined indicators rather than picked a specific indicator as the poverty count. Fifty-seven percent of the organizations included free/reduced lunch count in their response. The "other" response did not list any other specific measure but mostly just stated concerns that the count should be accurate and timely.

More than 84% of the organizations said they would support some type of tax increase if additional revenue were needed to make substantial changes to the formula. Rather than target a specific tax to raise the additional revenue, many responses combined different taxes. The state income tax was included in more than 65% of the responses. Additional tax sources listed under "other" were alcohol, riverboat gambling, tobacco, lottery, services and corporate.

Although the majority of organizations agreed that the issue of school district consolidation needs to be addressed, the number of categorical programs needs to be reduced, CPPRT needs to be revised, large block grants need to be created, and the method of teacher compensation needs to be changed; there were no clear-cut directions or opinions on what or how to accomplish these tasks.

The information collected in this survey complements other activities that the EFAB have completed. All of the pieces will assist in recommendations it will make to the General Assembly.