State Funding for Chicago Public Schools

August 21, 2013

At the end of the month, the Board of Education for Chicago Public Schools will vote on the District’s $5.6 billion operating budget for FY2014. The total budget of $6.6 billion is supported by local, state and federal revenues and other resources, including $761.6 million of appropriated fund balance. This blog focuses on the State of Illinois’ resources for CPS.

The State of Illinois will provide a total of $1.8 billion of revenues in the CPS FY2014 budget, which is a slight decrease of $8.2 million from the FY2013 amended budget. This includes $1.6 billion of revenues allocated to the District’s General Operating Funds, which reflects a $28.2 million increase from the FY2013 amended budget. 
 

General State Aid (GSA)

The General State Aid (GSA) foundation level is the financial support per student representing combined State and local resources available resulting from the General State Aid formula.[1] The GSA formula is intended to ensure that all students in Illinois have access to a certain level of educational resources. The GSA distribution to school districts is based on a number of factors, including local property tax capacity. The GSA distribution formula assumes that school districts will levy for all available local property taxes first before the State provides additional funding to reach the foundation level. GSA represents two-thirds of the State’s General Funds expenditures on primary and secondary education in Illinois.[2]

The GSA foundation level will remain at $6,119 per pupil in FY2014, the same level it has been since FY2010. The last time the foundation level rose was between FY2009 and FY2010, when it rose by $160, or 2.7%, from $5,959 to $6,119 per pupil. Early this year, the Illinois Education Funding Advisory Board (EFAB), which was created to make recommendations to the Illinois General Assembly on GSA grant levels, recommended to increase the GSA foundation level to $8,672 per pupil. This increase would require an additional $4.7 billion in GSA funding from the prior fiscal year appropriation, for a total of $9.0 billion.

Beginning in FY2012, the State of Illinois reduced GSA payments to school districts because the statewide appropriation for GSA funding was insufficient to pay for the foundation level. In FY2012 all school districts received 94.8% of their GSA funds.[3] In FY2013 the pro-rated amount dropped to 89.1%.

In Governor Quinn’s FY2014 proposed budget, the Governor recommended an appropriation of $4.1 billion for General State Aid, a reduction of nearly $150.4 million, or 3.5%, from the FY2013 enacted appropriation and less than half of the EFAB recommendation.[4]  According to the Illinois State Board of Education (ISBE), the Governor’s proposed budget reflected an allocation of 82% of the $6,119 statutory foundation level. ISBE proposed an allocation of $5.0 billion, or 100% of the foundation level. The final enacted budget passed by the General Assembly and signed by Governor Quinn in Public Acts 98-0033 and 98-0034 appropriated $4.4 billion toward General State Aid, a level that allocates approximately 89% of GSA to all school districts.[5]

For CPS, total GSA revenue is estimated to be nearly $1.1 billion in FY2014, an increase of $9.6 million from the FY2013 budget. Of this amount, $120.1 million will be used for debt service and the remaining $965.5 million will be allocated to the General Fund, as shown in the table below. The table below includes Supplemental GSA, which are additional funds allocated to CPS for low-income pupils. Although the State has a history of delaying payments to the District, the State caught up on its payments in FY2013. The District assumes that the State will make FY2014 payments on time.

Other State Funding for CPS

The State will contribute only the statutorily required contribution in Teacher Pension aid to offset a portion of the cost of benefit increases enacted under Public Act 90-0582. This amount is $11.9 million. As recently as FY2009, the State also contributed $65 million to CPS teachers’ pensions in addition to the statutory requirement. The State drastically reduced this amount in FY2010, reallocated the additional funds to retiree healthcare costs in FY2011 and eliminated it in subsequent years.

With the State’s adoption of a major new school capital program in FY2010, CPS anticipated $446.0 million in State capital funding over six years. In FY2014 the District anticipates receiving approximately $54.1 million, which is the final expected payment.[6]