Opponents and critics of private school choice policies have long said that introducing or expanding private school choice programs will take money away from the public school system. While sometimes an effective scare tactic, in Illinois this claim is in fact a myth.
Education Funding: A Crash Course
In general, school funding formulas include three buckets of revenue inputs: federal, state, and local. Local funds usually come from property taxes (but not exclusively) in the town or county where the schools are located. States supplement the local resources with additional funding from general revenue sources. Finally, the federal government provides funds typically tied to specific federal programs, such as Title 1.
Some formulas weight different scenarios (for example, schools serving more low-income and/or English Language learners could receive additional monies), while others allocate funds on a flat per-student rate. These scenarios are the simplest ways schools are funded and additional routes may exist. The basic building blocks to know, however, are education funding comes in many forms and from different buckets.
In Illinois, the school funding formula is more complex, but generally follows the pattern of revenue inputs described above. A unique component of Illinois’ funding formula is that state funds are appropriated based on an “adequacy” calculation to ensure districts meet the cost to educate all enrolled students.1 The state adds additional monies that are then prioritized based on those districts whose local funding capacity is in most need of additional state support.
A host of research reports have been completed over the years to explore this myth. According to EdChoice, a national school choice research and policy organization, there exists 55 studies detailing the fiscal effect of school choice programs in various states. Of the 55 studies, 49 found positive fiscal effects where private school choice programs exist, while only two studies found negative fiscal effects.2 Moreover, the Reason Foundation examined data from the National Center for Education Statistics3 and found that inflation-adjusted K-12 education spending per-student has increased approximately 280% since 1960.4 Furthermore, according to further research by EdChoice’s Dr. Ben Scafadi, real education spending has increased 27% between 1992-2014.5 These studies indicate that public school funding is not being siphoned away, and in particular, not at the expense of increasing private school options for low-income families.
The first private school choice program in America–the Milwaukee Parental Choice program–came online in 1990 setting off what has been 30 years of growth in private school opportunity programs. According to the American Federation for Children, private school choice programs are serving more than half a million students today, more than doubling since 2012 alone.6
The landmark, bipartisan Invest in Kids Act created a $100 million Tax Credit Scholarship Program, and was passed within a broader public education funding reform policy. Specifically, the public school funding reform legislation created an evidence-based funding model that sought to address gaps in funding “adequacy” among the 852 school districts in Illinois. The funding formula includes a “hold harmless” provision, which means no district will receive fewer dollars than they received in the 2017-2018 school year. Perhaps most importantly, the funding formula requires an annual increased state investment of at least $350 million until the state reaches full, 100% “adequacy.”7
Since 2018, the first year that the Invest in Kids Tax Credit Scholarship Program could raise funds, the program has raised approximately $138 million, with the state offering tax credits on approximately $103 million of this number. During that same period, the State has increased its investment in public K-12 education by more than $1 billion ($350 million in each of the first two years and $375 million in the third year).8 Even if the tax credit scholarship program would have raised the full $100 million in each of its first 3 years, it would still be over $100 million less than one year’s required increased investment in Illinois’ public schools. Illinois’ commitment to its public schools has not wavered with the addition of the Tax Credit Scholarship Program; in fact funding has soared to new heights.
While this myth can and should put to rest, it is important to understand that school funding formulas are complicated. When a district loses a student for any reason, the district does not necessarily lose the funding associated with that student. In Illinois, because of the “hold harmless” provision of the funding formula, a school district that loses students would retain the funds otherwise associated with that student, giving the district more dollars to work with per student, not fewer. Illinois is further proof that private school opportunity programs and public school funding can and do exist in harmony.