Illinois lawmakers announce plan to close school funding gap

A plan to significantly boost funding for public education in Illinois has been introduced to both houses of the state Legislature as some lawmakers aim to eventually tax millionaires and digital advertisement to help bridge billions needed to finance schools.

Standing among teachers, members of the Chicago Teacher’s Union and others in the education field, sponsors state Sen. Graciela Guzmán, D-Chicago, and state Rep. Will Davis, D-Hazel Crest, announced on Monday the introduction of their respective bills to fund Illinois schools to match the requirements of a nearly decade-old benchmark the General Assembly set for itself.

In 2017, lawmakers passed the evidence-based funding formula, which allocates funds to schools based on their individual needs and demographics. With it came the promise to fund each school’s needs by at least 90% by 2027, as well as “mandated categoricals” — such as transportation for students with disabilities and aspects of special education — that schools are required to fund via state and federal law.

The new proposals, introduced last week, would fulfill the requirement — bridging a $5 billion gap that increased for the second year in a row last year, increasing $573 million — while fully funding the “mandated categoricals.”

“The evidence-based formula was designed to correct generations of disinvestment,” said Guzmán, a former CTU organizer. “But it only works if it's actually funded. ... This bill is about fulfilling our promise that Illinois should meet the needs of our students, families and communities."

The proposals don't directly hike taxes, but Guzmán pointed to other proposals that would tax millionaires and digital advertising as a revenue stream for schools.

Davis also pointed to Gov. JB Pritzker's announcement of a plan to pay off state pensions years earlier than previously promised, saying education should be put on the same level as pensions when it comes to state priorities.

“He’s prioritizing big sums of money in other areas,” Davis said about Pritzker. “The administration has a comfort level of where we’re at right now, but when we see those press releases, he’s prioritizing big sums of money into a lot of other areas. … In my conversations, they have a comfort level. We need to move out of that comfort zone.”

Ralph Martire, executive director at the Center for Tax and Budget Accountability and a co-author of the original evidence based funding formula legislation, said a millionaire’s tax could be tricky, as it would likely require a state constitutional amendment to override Illinois’ restrictions on such a measure.

He suggested increasing the state income tax while adding a low income credit as a way to generate what he says is potentially more than $3 billion in revenue left on the table, while instituting a more progressive tax structure with less legal headwinds. Expanding the state’s “narrow” sales tax alongside that, mirroring neighbors Iowa or Wisconsin, could net another couple billion — enough to cover the costs.

“I think they’re trying to put pressure on the General Assembly and governor to do what the state said it would do,” Martire said. “But to live up to its statutory obligations, it certainly needs more revenue.”

Pritzker didn’t immediately respond to a request for comment. Guzmán and Davis said they have yet to speak with the governor, but they have been in touch with members of his team.

Last year, CPS was one of more than 300 underfunded districts in the state getting a smaller percentage of what it needs compared to the prior year.

At the current rate, it will take until at least 2037 to reach the level mandated by the original bill, closing a $3.3 billion gap, according to the Center on Tax and Budget Accountability. Now Guzman and Davis say that’s been pushed to 2039. On top of that, mandated categoricals would add another $1.7 billion, according to Martire.

And the gap is widening. The state pointed to a significant decrease in revenue from a state tax on corporations, as well as “rising education costs” like inflation and cost-of-living raises, as to why schools statewide lost an average of half a percent toward adequacy, down to 76.6%; CPS saw a six-point drop to 73%.