Evidence-Based Funding

If the Evidence-Based Funding (EBF) Formula were fully funded, Illinois schools would see about $4.5 billion more in State funds, of which around $1 billion would go to CPS. When EBF passed, there was a stated intention to reach full funding by 2028 and a somewhat contradictory establishment of a $350 million “Minimum Funding Level” that wouldn’t possibly enable us to reach that full-funding-in-ten-years goal.

It’s not just Chicago – more than 600 districts are underfunded…and FY25 “will be a ‘bloodletting’ for the education industry… as it weathers the financial shock of the funding cliff.” So, an increase to the $350 million Minimum Funding Level would be especially welcome in this year’s budget. CPS and the vast majority of Illinois’s other school districts need the infusion of EBF this year more than ever.

How much of an increase? Of course, a $4.5 billion increase is out of reach in just one year. But Illinois’s students cannot wait another generation to have adequately funded public schools. The $350 million floor loses its buying power every year as the cost of educating students increases. Even if we just kept pace with inflation, that $350 million from 2018 would be $437 million today. The Funding Illinois’ Future Coalition is asking for $550 million.

Successful Outcomes

One more thing: just in case you’re wondering whether CPS and other Illinois districts are putting their resources to good use, recent research on learning loss recovery found that Illinois is one of just three states to have surpassed its pre-COVID reading scores. It found CPS to have significantly outperformed other large districts across the country. The Educational Opportunity Project at Stanford University has created searchable tools to dig deeper into where those achievement gains were greatest. The scatterplot below shows 2022-2023 achievement gains in reading by districts’ low-income rates. The larger the circle, the larger the enrollment of the district. Chicago is highlighted, but there are lots of other Illinois districts beating the odds for their students and closing the learning loss gap (Rantoul, Cicero, East St. Louis, Steger, Crete Monee, Peoria, Dolton, Cahokia… ). Go poke around and find your district schools!

Teacher Pension Funding Inequities

I’d be remiss if I ended this blog without discussing the hidden inequity in Illinois’ school funding structure. Teacher pensions are inequitably funded on two fronts: first, Chicago vs. the rest of IL school districts, which have historically been funded very differently. And secondly, underfunded school districts, which generally have lower salaries and thus, benefit less than better funded districts when the state picks up everyone’s employer pension tab.

Chicago teachers participate in their own pension fund, not in the state’s Teachers’ Retirement System. Historically, CPS has paid the employer costs for teacher pensions that the State covered for all other districts. Evidence-Based Funding provided a partial fix for this inequity: now the school funding formula pays the current employer costs for Chicago teacher pensions.

However, CPS is still covering its “legacy costs” (or you could call it “debt” from past years of not keeping up with current payments), which the State continues to fund for all other districts. The amount CPS pays in legacy costs is deducted from the local resources counted for school funding purposes, which is a nod toward equity, but Chicago taxpayers remain on the hook for costs that the State covers for everyone else. (And CPS only netted $23 million from EBF in FY24, so that “nod toward equity” isn’t a very substantial one.)

How much of an inequity is this? Well, compared to “Tier 4” district under EBF (that is, one with at least 100% of adequate funding), CPS sees about $4,000 less per pupil and districts with less than 70% of the funding they need see about $1,500 less per pupil:[1]

“Sees” is probably not the right choice of word – because schools don’t see it at all. It comes from the State budget – right off the top. It’s invisible to schools. Especially the legacy costs. For the most part, the State pays the current employer costs of teacher pensions. But the debt? The State failed to keep up with pension costs, the debt stacked up, and it has caught up to us. Not because teacher pensions are especially generous. They’re not. Particularly for newer teachers hired after 2011. It is, nevertheless, a large chunk of the state budget.

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There’s no easy answer to any of this. Today’s leaders didn’t create the problem; they inherited it. But we owe it to our children – in Chicago, the suburbs, and downstate – to figure it out and fully fund our public schools as fast as we reasonably can.  A $550 million increase to Evidence-Based Funding in FY25 would be a good place to start.

P.S. – If you are a legislator who agrees that $350 million for EBF is a floor not a ceiling, you can share your support by taking the pledge here.

[1] Calculated using data from: our TRS FOIA for pensionable payroll by school district received November 2023, Commission on Government Forecasting and Accountability state retirement systems report December 2023 actuarial projections certifying the contribution rate of 48.7%, Chicago Teachers’ Pension Fund annual financial report of state paid normal cost minus the amount to defray retiree health care, and student enrollment data from the Illinois State Board of Education’s FY24 Full EBF Calculation. We included CPS’s approximate EBF amount gained through the unfunded liability offset in its local resource calculation as state payment toward CTPF normal cost in this calculation.