State Sen. Andy (D-Decatur) Manar believes the Illinois legislature is close to reforming the formula for school funding.
“As the work for formula reform continues, I think we’re pretty close to that actually, believe it or not. Before the spring session adjourns we will have a bill passed,” Manar said.
However, reforming that formula does not fix the funding problems in Illinois schools, according to Manar, Jessica Handy, government affairs director for Stand for Children; David Ardrey, executive director for Association of Illinois Rural and Small Schools; and Bill Curtin, English teacher at Carbondale Community High School.
“We’re here to talk about a specific piece of the larger issue of school funding that we’ve been working to try to address,” Manar said.
The gains made on the school funding formula are going to be mitigated by inequities in pensions, specifically within the Teacher Retirement System (TRS).
The group is advocating for passage of three bills before the Illinois legislature.
Two bills are basically identical and would reduce the TRS federal funds rate to the normal costs of teacher pensions. They SB 195 and HB 656.
The other bill, SB 865, would require school report cards to include information on the total amount the district spends on teacher pensions.
“First bill passed out of senate education committee. It’s very simple, but it underscores the nature of how TRS money is accounted for and how it is attributed to school districts,” Manar said.
TRS payments are set by the number of teachers in a district and the salaries those teachers are paid. The bill for the pensions is sent to state government, state government budgets for it and pays the payment. The payment has two pieces: current costs and past costs.
Manar said there is terrible disparity among districts, but it makes sense. A district that has fewer students per class and pays teachers more, costs the system much more than a district that has more students per class and pays teachers less, such as many rural districts.
Then, there is the issue of the cost of pensions paid with federal funds.
These are funds intended for Title 1 kids, or low income students, or kids with special needs through IDEA, those federal funds if you hire a teacher with them,
“When a school district hires a teacher with their state or local money, they pay a small percentage toward TRS. It’s 0.58 percent of that teacher’s salary,” Handy said. “When a school district uses their federal funds … they take 39 percent off the top to pay pension debt. If you were just paying the current costs it would be about 7 percent, but they charge those funds with the total unfunded liability rate which is 39 percent now and in July will go up to 45 percent.”
Federal funds are Title 1 (for districts with the highest percentages of students from low-income families), Title 2 funds (to increase academic achievement by improving teacher and principal training) and Individuals with Disabilities Education Act or IDEA (offsets the costs of educating children with disabilities).
Handy said funds are distributed using a federal formula with Title 1 based on how many students a district has in poverty and Title 2 formula for professional development for teachers.
“Essentially, the metric that’s used drives those federal funds to districts directly, but the state intercepts the money to pay off teacher pensions. That causes fewer teachers to be hired, and we’re the only state that allows it,” Ardrey said.
Manar added that a lot of districts will hire two uncertified staff members instead of one certified because the pension costs are so much less. Uncertified school staff pensions are through Illinois Municipal Retirement Fund (IMRF) and not TRS.
“This is a disincentive to actually do what is instructionally best for your kids,” Handy said.
Curtin has seen the impact this funding system has in the classroom. He only has been in Carbondale two years, but taught six years before that in Kankakee School District.
For teachers hired with federal money, it becomes “a revolving door,” according to Curtin. If the school loses the funding, those teachers are laid off. By the time funding is secured for the next school year, many have taken other positions.
“So very quickly you get a situation where students can’t trust their teachers will be there for them,” Curtin said.
Curtin received a grant that funded laptops for students. They engaged in a community project that got them on “Late Night with David Letterman” and “This American Life.” He said they had resources to do the research, contacted the right people and got involved in their community.
“These kids have great potential, but they are not getting resources because we are putting funds toward teacher pensions,” Curtin said.
“We’ve got to pay it one way or another, but we think this is just the absolute worst place to pay it from,” Handy said.
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