IL Policy Institute statement on proposal to overhaul education funding formula

January 25, 2016

New report on education funding shows 89 cents of every new dollar for education goes to pensions – not classrooms.

CHICAGO (Jan. 25, 2016) – Today, Illinois Senate President John Cullerton proposed an overhaul to the way Illinois funds its public schools. While Cullerton and other lawmakers called for a change to the state’s complex school-funding formula, a new report issued today illustrates that such efforts may be fruitless until Illinois reforms its public pension system.

Calls for more education funding are frequent in Illinois – but when more money is sent education’s way, almost none of it reaches the classroom. According to a report released this afternoon by the nonpartisan Illinois Policy Institute, 89 cents of every new dollar allocated for education since 2009 has gone straight to the pension system. This means less than 11 cents out of every new dollar for education ever reaches the classroom.

“Illinoisans constantly hear that putting more money into schools will make everything about our public education system better. In the past five years, education funding has skyrocketed, but almost none of that money reached classrooms; instead, this money went to pay for out-of-control teacher pension costs,” said Ted Dabrowski, vice president of policy at the Illinois Policy Institute. “Illinois’ pension crisis is bankrupting the state and draining money that should be going to fund schools and help students.”

This fiscal year, Illinois government will spend about $10.3 billion on public education. Education funding in Illinois has increased by 30 percent over the past five years, according to the new report, “Pensions vs. schools.”

“Illinois absolutely needs to improve how it funds schools, but simply putting more money in a failed system will not solve the problem. Reforming the biggest problem for education funding – teacher pension costs – is the only way that Illinois schools will be able to get the resources they need,” Dabrowski said. “Illinois cannot afford any more politicians who recognize the financial problems of the state but respond with an answer of simply more spending. Illinois students deserve well-funded schools that prepare them for life, and Illinois taxpayers deserve a high-quality school system they can afford.”

Key data on Illinois’ education system include:

  • In 2015, Illinois spent $10.3 billion on education funding. That equals $14,630 per student, which is up from $9,560 in 2004, a 53 percent increase.
  • Education spending has increased by 30 percent in Illinois since 2009.
  • Since 2009, the data show that 89 cents out of every new dollar for education spending has gone to pay for teacher retirement costs.
  • The pension fund for K-12 public school teachers in Illinois has only 40 cents for every $1 in promised benefits.

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