SPRINGFIELD – The Illinois State Board of Education voted Wednesday to approve a budget request for the upcoming fiscal year that calls for only a minimal increase in K-12 education spending, a reflection of the state’s tightening fiscal condition.

Overall, the $10.9 billion request would be a slight decrease from the current budget of just over $11 billion. But that is only because funding for early childhood education, which totals almost $750 million this year, is being shifted in the upcoming year to the newly created Department of Early Childhood, an initiative Gov. JB Pritzker pushed in 2024.

Otherwise, the request seeks a $350 million increase in the Evidence-Based Funding formula. That’s the minimum amount called for under the 2017 law that aims eventually to bring all districts’ funding up to at least 90% of their adequacy target.

That includes $300 million in direct educational expenses, plus $50 million for property tax relief grants for certain high-tax districts.

10 years of EBF

The upcoming fiscal year, which begins July 1, will mark the 10^th year of the EBF program. When it began in fiscal 2018, according to the state board, 168 of the state’s 852 school districts were being funded at less than 60% of their adequacy target.

Today, none are below the 60% level, but 48 districts are funded at less than 70% of adequacy, and 532 districts are below the 90% target.

The proposed increase for the upcoming fiscal year would bring the total amount of EBF funding to just under $9.3 billion in fiscal 2027. According to ISBE data, however, it would take yet another $3 billion to bring all districts up to at least 90% of their adequacy target.

Mandated categorical funding

The state board’s budget request also seeks an increase of $151 million, or 13%, in what are called “mandated categorical,” or MCAT reimbursements to school districts. Those are mainly non-classroom expenses that school districts have to cover – including certain transportation and special education expenses – that are not included in the Evidence-Based Funding formula.

Over the last several years, budget constraints have resulted in the state funding only a prorated share of those costs.

In the current fiscal year, for example, state funding covers only 60% of the cost of transporting students to special education programs, which is down from 71% in fiscal 2024. The state also covers only 75% of the cost of transporting students to regular vocational education programs, down from 85% in fiscal 2024.

The proposed increase in MCAT costs would hold the proration percentages level in fiscal 2027.

Public hearings

Before drafting the budget request, fiscal staff at the state board conducted a series of public hearings to receive input from school officials and other interested groups. The agency also considered economic analyses and revenue projections from both the governor’s office and the General Assembly.

The Governor’s Office of Management and Budget reported in October that it expects state revenues to fall below previous estimates over the next several months, resulting in a $267 million deficit in the current fiscal year and a $2.2 billion deficit next year, unless action is taken to increase revenues or reduce expenses.

The agency said that’s largely due to changes in federal tax law that Congress approved last summer as part of the “One Big Beautiful Bill Act that will result in lower corporate income tax revenue.

Meanwhile, the General Assembly’s Commission on Government Forecasting and Accountability reported in December that it still had confidence the state would meet its revenue targets for the current fiscal year. But it cautioned about uncertainty in the months ahead created by changes in federal tax law.

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