Highlights of Illinois Ed Funding Package

BY KAY SHIPMAN

Gov. Bruce Rauner capped an eventful late August session when he signed legislation Thursday establishing a new method for distributing state payments to schools. Days earlier, the House and Senate each mustered supermajorities to pass the compromise legislation.

“This school funding reform bill brings historic change that will help generations of Illinois children,” Rauner said in a prepared statement. “We have taken a significant first step in transforming education in Illinois. I commend lawmakers on both sides of the aisle for working together to make sure every child across the state will have access to the best education.”

“The stakes were very high,” said Kevin Semlow, Illinois Farm Bureau director of state legislation. “All Illinois school districts opened on time, but many were faced with shrinking cash reserves that would only allow their doors to remain open for a few months.”

The compromise funding formula is an evidence-based one, which the state budget required to distribute school payments. Semlow explained much of the compromise formula mirrors one included in the SB 1 evidence-based funding model with a couple of changes.

According to Semlow, the most notable changes include:

- A new private school scholarship income tax credit

- A new provision for a school property tax extension reduction.

- Chicago Public School teacher pension provisions and mandate relief. 

Under the new education tax credit program, individuals may receive an income tax credit equal to 75 percent of their total contribution to a private school scholarship granting organization established through the Illinois Department of Revenue. The state will grant tax credits totaling $75 million statewide. The new law also stipulates student eligibility for those scholarships and requirements for private schools that grant the scholarships.

The new law allows Chicago to raise its property tax rate to help pay teacher pensions and transfers $221 million to the Chicago Public School system for the employer portion of teacher pension payment and health care costs.

The law also offers districts relief from some mandates. These include reducing the physical education requirement to three days per week and allowing school boards to contract for driver’s education with approval during a public hearing.

The law creates an expedited school mandate waiver process through the legislature. Currently, a district may be granted a mandate waiver if approved by the General Assembly. The new expedited process will allow granting of any waiver unless three of the four legislative leaders object. In that case, the district may seek a waiver through the longer, existing process.