New law provides equitable funding for charter public schools
“Today, Governor Bruce Rauner signed historic legislation that provides a fair funding system for children across the state—whether they live in Champaign, Collinsville, or Chicago. INCS has always supported a funding formula that more accurately reflects actual need and allocates additional funding for low-income districts, which is what this law does, said Andrew Broy, president of the Illinois Network of Charter Schools (INCS).
“This law also provides equitable funding for charter public schools for the first time in Illinois history. We want to thank the legislative leaders who made this possible,” Broy said. “Equally important, we want to thank the thousands of charter parents, teachers, and community supporters who have fought for this equity over the past six years. They have rallied, volunteered on campaigns, voted, scheduled hundreds of legislative visits, and made their voices heard. This is their victory.”
Here’s what this new law does:
- Reforms statewide funding formula: The law changes the statewide school funding formula so that additional funding will flow to districts with higher concentrations of poor students and districts with lower levels of property wealth. This has been a 30-year struggle to recognize that districts with higher concentrations of low-income students and students who require additional supports need additional state revenue. This funding formula change will endure, and new funding will now flow much more equitably.
- Provides charter funding equity: This new law requires that every charter school in Illinois be funded between 97% and 103% of the host district’s per capita tuition charge (PCTC), up from 75% to 125% per the current law. PCTC is a calculation by the Illinois State Board of Education (ISBE) to quantify the amount a school district pays from its own resources for each student. This represents a major win for the charter community and will require operational funding parity for the first time in Illinois history.
- Gives CPS additional funds: Chicago Public Schools (CPS) will receive approximately $327 million in new money from the state, $221 million of which is the payment of the district’s normal pension costs. The rest is an adjustment of the formula and a few additional payments. Crucially, and this is a change from Senate Bill 1, the pension funding will be in the statewide pension budget, not in the school aid funding formula.
- Establishes a new tuition tax credit program: Illinois has established a new school choice program in Illinois. Modeled on similar programs elsewhere and pushed hard by Chicago Cardinal Blase Cupich, this law creates a $75M tuition tax credit program that allows donors to give to a student scholarship program and receive a 75% credit on their state tax liability. The proceeds will then be donated by the scholarship granting organization to a student for tuition use at a private school. There is no annual escalator on the $75M cap on the tax credit, and the plan has a five-year sunset, meaning it needs to be renewed in five years.
- Renewed ability for CPS to raise taxes locally: The law provides Chicago some flexibility in their annual property tax levy, allowing CPS to go above the current statutory limit on annual property tax increases to raise local dollars. The law empowers the appointed Chicago Public Schools Board to make this change.
- Potential for local districts to implement property tax relief: The law allows non-Chicago districts to provide property tax relief locally.
INCS believes in the power of education to transform lives and communities. The simple reality is that our state’s funding system has historically not been fair to all Illinois students, especially those in the most underserved areas. This law puts us on a pathway to fix this for all public school students, those in charter public schools and those in district-managed public schools.
“We congratulate the Governor and members of the House and Senate for doing the right thing by putting children first. It is truly a historic day,” Broy said.
About the Illinois Network of Charter Schools (INCS)
The Illinois Network of Charter Schools (INCS) advocates for the improvement of public education by leveraging the charter school model as a catalyst to transform lives and communities. INCS works to ensure that charter public schools have adequate and equitable resources, the autonomy to find innovative approaches to meet student needs, and a fair and transparent policy landscape that allows high-quality options to thrive. As the voice of Illinois charter schools, INCS engages a diverse coalition of policymakers, school leaders, parents, and community members to create systemic change and secure high-quality schools for underserved communities. Learn more at www.incschools.org.