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By BILL KEMP


Educating Johnny and Janie: disparities in local per pupil spending


"The state has the primary responsibility for financing the system of public education."
— 1970 Illinois Constitution,
Article 10, Section 1, Paragraph 3

"Since education is a state obligation, the state has an obligation to give the kid in Metropolis the same chance the kid in Winnetka has, regardless of what the [district's] ability is."
— State Rep. Gene L. Hoffman (R-40, Elmhurst)

1986-1987 Operating Expense Per Pupil
New Trier Township High School District 203, Winnetka     $6,433.56
Massac County Unit District 10, Metropolis                           3,326.59


Adjusted for inflation,
Illinois fell from a rank
of fourth among states
in state expenditures
per pupil (kindergarten-
12th grade) in 1977-1978
to 28th in 1987-1988

Parents living in Winnetka, an affluent suburb northwest of Chicago, may not know that twice as much is spent on their teenager's high school education than is spent for educating a student in Metropolis, a small southern Illinois community. Among the state's 981 school districts, vast differences exist in per pupil spending. Today in Illinois, the ideal of equal educational opportunity for all school children is more myth than reality. School districts mirror the economic condition of their respective communities far more than any high ideal of equity.

The gap in per pupil spending between the "have" and "have not" school districts in Illinois has increased over the last decade, according to the Illinois State Board of Education. Schools receive the majority of their dollars from two sources; local property taxes and the state. As the state's share of the education spending has decreased since 1975-1976, local educators have turned to the district taxpayer for help. The property tax encourages disparity, however, because wealthy property districts can raise more money with lower taxes.

G. Alan Hickrod, director of the Center for the Study of Educational Finance at Illinois State University, said that as state education funding stagnated over the last decade, those districts that rely upon state money have been adversely affected. "It's the responsibility of the state to make sure the low end districts don't get too far behind," he said. In 1975-1976, the state was responsible for 48 percent of education spending. By 1987-1981 the state's share had dropped to 39 percent. In 1976 the state spent $883 per pupil; in 1988 — in 1976 constant dollars —the state contributed $758 per pupil. While state per pupil spending in constant dollars dropped $125 over the period, local spending increased $192. Hickrod said that Illinois continues to move in the opposite direction from the nation as a whole. The national trend is an increased role for the states in education funding. Other figures back Hickrod's assertion. Adjusted for inflation, Illinois fell from a rank of fourth among states in state expenditures per pupil (kindergarten-12th grade) in 1977-1978 to 28th in 1987-1988.

State board figures for the 1986-1987 school year highlight the problem. The greatest gap is in elementary schools. The operating expense per pupil at Pembroke Community Consolidated School District in Kankakee County is $2,125; it is $10,926 per pupil at McAuley School District 27. In unit districts, which are a combination of elementary and secondary schools (K-12), the expense per pupil ranged from the $2,474 spent at Staunton Community Unit in Macoupin County to Byron Unit District's $6,668. For high school districts,


May 1989 | Illinois Issues | 20


Operating expense per pupil by type of district for 1982-1983 and 1986-1987
  lowest district statewide average highest district number above average number below average
Elementary
districts:
1982-1983$1,633$2,786 $9,189162274
1986-19872,1263,825 10,927127301
High school
districts:
1982-19832,7934,179 8,0254680
1986-19873,0355,531 9,2344081
Unit districts:
1982-19831,9643,021 5,256117331
1986-19872,4743,716 6,66877365
NOTE: The number of districts declined between 1982-1983 and 1986-1987.
Source: Illinois State Board of Education.

Seneca Township High School spent $9,234 per pupil, while Pontiac Township High School District spent a state low of $3,034.

Large disparities in operating expense per pupil are not new. Affluent districts have always outspent relatively poorer rural districts. What is new is that a greater number of districts are falling below the state average in operating expense per pupil. It is an emerging trend that troubles Michael Belletire, the IIlinois State Board of Education's associate superintendent for finance and support services. The average operating expense per pupil for the state's 436 elementary school districts was $2,786 in 1982-1983. There were 162 districts above that average and 274 below it. In 1986-1987 the average operating expense per pupil in the 428 elementary districts was $3,825. There were 127 districts above the average and 301 below. The pattern is repeated when looking at unit districts: Approximately 35 districts have slid below the average in operating expense per pupil. In other words, the "haves" club is becoming smaller and more exclusive. Belletire said that although statistics are not available after the 1986-1987 school year, the trend is worsening. "The system is just not equitable," he said.

The State Board of Education released a report in December entitled Illinois Public School District Ability and Effort Factors: 1986-1987. The report allows comparisons between districts on the level of their "ability" to finance education — in other words, the property wealth of the district — and their "Effort" to raise finances locally — in other words, the tax rate of the district. The report highlights the importance of not only a district's tax base, but also the effort of local taxpayers. For example, Rosemont Elementary School District near Chicago's O'Hare Airport is a property wealthy district. At $672,273 in equalized assessed valuation per pupil (the property wealth in the district per student), Rosemont Elementary ranks fourth in "ability" among the 302 elementary districts with enrollments below 1,000. Rosemont's operating tax rate is the second lowest of the 302 schools, but its operating expense per pupil ranks eighth at $6,834. The Rosemont district has the wealth to allow a low tax effort and still maintain a comparably high expense per pupil. It is a luxury that most districts do not have.

In sharp contrast to Rosemont is the economically depressed East Chicago Heights (Ford Heights) elementary district in Cook County's south suburbs. Its property wealth per student is at the bottom 30 percent of those elementary districts with less than 1,000 pupils. East Chicago Heights has the highest taxing rate in its peer group — four times that of Rosemont — but its per pupil expense is still $1,800 below that of Rosemont's. East Chicago Heights, with its comparably low ability to raise tax revenue, shows an extremely high effort to tax itself, but still its per pupil spending falls far short of Rosemont's level.

Belletire said that as education funding in Illinois has evolved into a greater reliance on local districts' effort and ability, those districts with low ability and/or low effort have fallen behind the ones that can afford to fund education locally and do not have to rely on the state. Evanston Township High School is an example of a district that has picked up the slack left by the overall decline in state education funding. Not only does Evanston have the ability with $210,772 of property wealth per pupil, but the district shows tremendous effort to tap that wealth. Of the 21 high school districts with enrollments of 3,000 to 6,000, Evanston has the highest tax rate. Because of the community's property wealth coupled with its willingness to pay higher property taxes for schools, Evanston spends over $7,000 per pupil. That is one of the highest in the state and second only to Niles Township Community High Schools's $8,950 in its peer group.

As for state funding for local schools, 60 percent of the state's elementary and secondary education budget goes through the school aid formula to the districts. The remaining 40 percent goes to categorical grants for things like vocational and gifted education and for the 1985 reforms. One goal of the formula is to equalize the per pupil spending among districts, but as the state's role in funding declined, the equalizing effect of the formula weakened. The complex formula is driven by a number of variables including the type of district, the number of students below the poverty line and most importantly its property wealth. State money is apportioned through the formula on a per pupil basis. In 1987-1988, three-quarters of the schools received money through the "resource equalizer" computation and can receive no less than $2,057 per pupil in state and local revenues. The "alternative method" is used by 163 wealthier districts, which guarantees between $144 and $267 per pupil.


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Sixty-three of the wealthiest districts in the state receive a "flat grant" of $144 per pupil.

Rep. Hoffman, author of the current school aid formula drafted in 1973, said the only way to close the gap between the "haves" and "have nots" is to dramatically increase state money to districts with lower property wealth. "It can be done theoretically and technically; the difficulty lies on the political side," he said. Hickrod agrees, arguing that the state should pump a dramatic increase into the school aid formula to go directly to the poorer districts "in order to pull the lower end of the distribution up." Conventional Statehouse wisdom maintains, however, that any sufficient increase in education funding must be coupled with a redrafting of the school formula so that no district comes out a loser — meaning everybody must receive some increase from the state.

The vast economic and social diversity in Illinois makes any tampering with the formula a poltically monumental task. First, Illinois has approximately 1,000 school districts, more than any other state except Texas and California. In addition, Illinois has three types of districts, a system which adds to the already complex system of funding. As of 1987, there were 116 secondary, 422 elementary and 439 unit

. . . school aid reform has
become one of the most
discussed but least acted
upon issues in state
government during the
last five years

districts in the state. The share for the school aid formula is computed differently for each type of district. Illinois is also a state with affluent suburban districts, downstate districts with public utility-rich tax bases, large financially troubled urban districts and rural districts struggling with declining enrollments and a reliance on an uncertain farm economy. Add to this volatile mixture political party wrangling, and school aid reform has become one of the most discussed but least acted upon issues in state government during the last five years.

The problem is illustrated in formula reform proposals spearheaded by suburban legislators representing affluent districts, mainly in the collar counties around Cook. Since many of the weathier districts receive only the flat state grant of $144 per pupil, collar county legislators will only support a state income tax, and thus increased revenue for schools, if the formula is redrawn to increase the flat grant amount their schools receive. In DuPage County legislators use the battle cry of equity as frequently as distressed districts. Why? Because DuPage residents contribute a great deal more in taxes to the state's education pot than ever will return to their district.

Downstate districts have coupled support of an income tax increase with property tax relief. State Sen. John Maitland (R-44, Bloomington), the senior Republican on the Senate Elementary and Secondary Education Committee, is one of the backers of an education package promoted by the Illinois Farm Bureau. The package, which seeks to appease the many factions, includes a provision to raise the income tax tied to a 25 percent reduction in local property taxes. For the suburban legislators this plan offers a $200 increase in the flat grant level. This Farm Bureau approach, with a little something for everybody, is probably the only politically realistic avenue to dramatically increased state education funding.

Taxpayers may have reached their limit in their willingness to increase property taxes for local education funding. That's an emerging trend, according to ISU's Hickrod. On April 4, there were 150 referenda on school district ballots to raise school tax rates and to issue bonds. Ninety-one, or 61 percent, failed. At the same time the state's percentage of education funding is declining, Hickrod believes property taxes have been pushed as high as they can go in many districts. "Both sides are quitting. The state is reneging on its side by not raising the formula and the local people are not doing it either. When that happens the districts are really shut off. That's the end of the ballgame," he said.

Hoffman points to Washington state for a theoretically but not politically feasible solution to the problem of spending disparities. In Washington, the state provides for 80 percent of a district's funding. In effect, spending is kept down in the wealthy districts because districts may raise locally only 20 percent of their budgets. "Washington's answer is not politically possible in Illinois. It is very difficult to provide equity in a formula when you have three types of districts," according to Hoffman. Iowa is another example. It is in the process of closing the gap between the higher and lower spending districts by eliminating an unfair advantage given to districts with declining enrollments. But Illinois is more complex than either Iowa or Washington with each of its many more diverse interests carrying their own political clout.

Even if equity were achieved, per pupil spending on education has no one-to-one relationship with quality of education. The Chicago school district's operating expense per pupil is $4,623, ranking it the highest of the 21 unit districts with enrollments over 6,000. The Chicago system, labeled "worst in the nation" in 1987 by then-Secy. of Education William Bennett, has lower test scores than Decatur School District 61, which ranks last in per pupil spending among the same 21 districts. Decatur spends almost $2,000 less per pupil than Chicago. Community stability, number of students below the poverty line and teacher salaries and morale are among the many variables that have an effect on quality of education. There is general agreement that the number of districts placed on the State Board of Education's newly created financial watch-list is growing because many districts have reached their "effort" limit. The New Triers of Illinois are becoming fewer while the majority of districts struggle with fewer state dollars and an unwilling local taxpayer. The ideal of educational equity and fairness remains a goal, but the combined obstacles of Illinois politics and Illinois diversity continue to stand in the way.


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