Policy institute backs Rauner's veto of school funding bill
Gov. Bruce Rauner's amendatory veto of the state's public education funding bill would finally eliminate "some of the most unfair and inequitable practices" in K-12 funding: subsidies brought about by tax increment financing (TIF) districts and the state's Property Tax Extension Limitation Law (PTELL), the Illinois Policy Institute contends.
"Since 2000, school districts that are part of economic development zones called TIFs have been allowed to do something that non-TIF districts can’t — hide large amounts of their property wealth from the state when applying for aid for education," Ted Dabrowski, the institute's vice president of policy, wrote on the group's website.
Dabrowski said that such school districts can appear poorer than they are via TIF and PTELL, thus getting more money than they deserve and taking money from districts that truly need it.
In addition to TIFs, schools have also been under-reporting their property value as they operate under property tax caps, PTELL. In 2009, about $20 billion of property value statewide was located in TIFs. As a result, it was excluded from the school districts’ local property wealth. There has been a decrease, but it is still in the millions. In 2015, $12 billion worth of property value across Illinois remained in TIFs, the institute said.
"Over the past decade and a half, non-PTELL and non-TIF districts have been unfairly deprived of billions of dollars," Dabrowski wrote. "PTELL districts alone have attracted over $7 billion in special subsidies since 2000, according to ISBE [Illinois State Board of Education].”
Rauner's veto has three major immediate impacts, Dabrowski wrote.
"First, no district will get less funding than it received last year," he wrote. "The governor’s veto maintains SB 1’s original per-district hold harmless provision through the 2020-2021 school year. So, the subsidies districts were getting at the expiration of the existing formula, have been baked into the hold harmless provision."
Dabrowski also said the removal of TIF and PTELL subsidies will help determine any additional funding under the new formula.
"All districts in Tier 1 and Tier 2 (the tiers first in line for new money under the new formula) will continue to receive new money, but depending on their reliance on the subsidies, some will see more than others," he wrote.
Dabrowski also contended that removing extra provisions intended for Chicago Public Schools will benefit all other state schools.
"The veto’s impact on CPS, from the elimination of TIF and PTELL subsidies, to the reduction of the $200 million in 'block grant' funding, to the removal of the clause that lets CPS subtract its annual legacy pension costs from its local resources, will generate more new dollars that will be redistributed to districts across the state," he wrote.
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