A Step in the Right Direction

On May 31st, the Illinois legislature passed Senate Bill 1 (SB1), which is aimed at overhauling the state’s school funding formula, something which has been in the works for years. SB1 is now on the governor’s desk waiting to be signed. A Better Chicago applauds the efforts that led to the passage of SB1 and believes that solving this inequitable funding crisis is critical to building a strong education system that supports our students. At our recent education summit, A Better Chicago brought together three key leaders in this work to discuss the crisis in education funding. These and other leaders made the passing of SB1 possible because they proposed an evidenced-based solution focused on moving beyond politics to improve education for students. Below is our perspective on why reform is needed, the merits of SB1 and what barriers remain to enacting it.

Why is SB1 needed?

Illinois has the most inequitable education funding system in the nation. It currently ranks last in providing funding to its neediest students, spending only $0.81 on a low-income student for every $1 spent on a non-low-income student. This is counter to the common practice of spending more on low-income students, which is true in 30 states. Illinois stands in stark contrast to leading states like Ohio, Minnesota and South Dakota, who each spend over $1.20 per low-income student for every $1 spent on a non-low-income student. SB1 aims to eliminate this inequity in our state over time. [1] And addressing this inequity is critical recent research found that a 10 percent increase in the money available for each low-income student resulted in a 9.5 percent annual increase in students' earnings as adults. [2]

Historically, Illinois has chosen to rely on local property taxes for education funding, and it is that reliance that has created this problem. The Illinois State Constitution says the state has the primary responsibility of funding public schools, but Illinois has historically covered less than 50 percent of the cost. In fact, in recent years, the state's contribution to local districts has dipped below 30 percent. This leaves districts needing to either raise property taxes or cut critical programs to address the gap, and some communities are far more able to generate revenue by raising taxes. [3] The inequities of this approach have real consequences in Chicago and other districts serving lower-income students. According to Janice Jackson, Chief Education Officer of Chicago Public Schools (CPS), “the lack of fair funding from the state really inhibits the district’s ability to provide supports for students who need it the most.” 

The power of an evidence-based solution in driving progress

A critical reason SB1 has made it as far as it has is that the solution it presents is evidence-based.  Instead of politics as usual, real data were used to answer three questions: 1) How much funding does each school system require to adequately educate its students? 2) How much revenue does each system already generate from local sources? 3) How can state revenue be used to narrow the biggest gaps?

Defining Adequacy: The legislation uses an evidence-based model to consider the amount of money it takes to educate a child. This approach uses 27 components to calculate how much a district requires to provide a high-quality education to its students and by doing so, it acknowledges that children may require different resources to support success. [1] These components include costs such as ensuring effective class size ratios, providing full day kindergarten, and implementing programming for English Language Learners and special education services. Adding these costs together creates a district’s “Adequacy Target” – the amount the district needs in order to provide an adequate education to its students. The formula therefore calculates a higher target when there are more students with special needs, more low-income students, or more English Language Learners, for example.

Understanding Current Resources: SB1 then accounts for how much a district currently receives from the state. The difference between the “Adequacy Target” and current state funding is the “Local Capacity Target” – the amount a district would need from local sources to provide an adequate education for its students.  For example, a wealthier district like Evanston would be expected to contribute about 70% of the cost of education, while Rockford, which has significantly fewer local resources to draw upon, would be expected to contribute about 20% of education dollars locally. In its current iteration, SB1 uses current state funding to districts as a floor – essentially locking that amount in and ensuring that no district would lose money under the new formula. 

Closing the Gap: Taking into account what students currently receive and what they need, SB1 aims to direct new state dollars to those districts with the greatest gaps. Wealthier districts can continue to fund their schools well above the adequacy target with their local funds should they choose to.  This new funding model, which would be phased in over the next decade, has the potential to deeply impact the quality of education students receive in systems that cannot adequately fund education today and make Illinois a place that acknowledges and works to address inequity, not ignore it. According to Ginger Ostro, Executive Director at Advance Illinois, “With SB1, the neediest of school districts will receive funding first, giving low-income students, English learners and students with disabilities the fair and adequate funding they need to be successful in school.”

Looking Ahead

There are two challenges that must be overcome in order to enact SB1. First, there is a misperception that this legislation is a “bail out” for Chicago. One recent headline read “Illinois lawmakers attempt to bail out Chicago Public Schools yet again…” This, however, is a misrepresentation of the bill. CPS accounts for nearly 20 percent of the state’s total student population and would receive nearly 20 percent of state education funding under SB1. The reality is that no district loses funding under this new formula, and 268 districts would gain more money per pupil than CPS would. Districts like Waukegan and Aurora East would receive nearly $1,000 more per student, while CPS would receive $193 more per student.[2] Second, our state is facing significant broader fiscal challenges which need to be fixed to both fund SB1 and put our state on a more sustainable course. But we shouldn’t let those broader fiscal challenges delay making the tough reforms that are necessary to give all of our state’s children the education that they deserve. This evidenced-based approach shines a light on the gap between what is needed and what Illinois is doing, and that is something we need to deal with as a state.  With so many great leaders backing this legislation, we remain confident that our elected officials will put politics aside, find common ground and take action for our students.

Here at A Better Chicago, we are in the business of scaling evidence-based solutions and using data to assess and prioritize our investments. Given our commitment to that approach, we are excited to see that evidenced-backed solutions are at the core of SB1 and hope that proposals of these types of solutions continue to play a more central role in conversations about the quality of education in our city and state.



[1] Advance Illinois
[2] C. Kirabo Jackson & Rucker C. Johnson & Claudia Persico, 2016. "The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms," The Quarterly Journal of Economics, vol 131(1), pages 157-218.
[3] Kadner, P. (2015, March 26). Illinois schools have biggest funding gap in nation.
[4] Advance Illinois
[5] Fix the Formula Illinois