Confused About Hold Harmless Policies?

IL state capitol

It’s a truth universally acknowledged that a dramatic school funding formula overhaul must be accompanied by a “Hold Harmless.” (OK, maybe not universally, but school funding changes almost always include a provision that protects districts from getting less money than they used to. That’s a “Hold Harmless.”)

As Springfield continues working on school funding reform, the concept of a Hold Harmless deserves some attention. It is a term often bandied about but not always fully understood. The failure to think thoughtfully about the concept has implications.

When Illinois changed its school funding formula in 1997, it included a Hold Harmless that simply said no district would get less General State Aid than it received the year before. Sounds easy enough, right? In theory, the state would increase education funding over the years and districts would grow out of the Hold Harmless and live happily ever after under the new formula.

But in reality, that’s not what happened. Instead, some districts had declining enrollment or increasing local wealth and, years later, became eligible for Hold Harmless grants. It wasn’t there just as a short-term cushion to transition to a new formula; it became a barrier to the new formula actually working the way it was supposed to. In 2011 when the legislature finally stopped funding the Hold Harmless, over 60% of districts that qualified were ones that benefitted from the revised formula in 1997 and experienced a change in enrollment, poverty rates, or property wealth sometime after that.

The parameters for the hold harmless, and the length of the hold harmless are important considerations. A smart hold harmless can set the stage for smooth implementation and public embrace of a new policy. A weaker one can undermine an otherwise strong policy decision.

Springfield is on record for committing to reform the inequitable way that Illinois funds its schools across the state. There are examples of good and not-so-good hold harmless approaches here in Illinois and around the country. Our next funding formula will undoubtedly have a hold harmless provision. Click here for a deeper dive on the history of hold harmlesses in Illinois and other states.

Let’s learn from the past, then proceed with all deliberate speed to getting a better funding system in the coming months.

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