What's in the School Funding Reform Agreement

Evidence-Based Funding Formula Changes:
  • The Minimum Funding Level (MFL) remains at $350 million per year. In FY19 and subsequent the target would be to allocate $50,000,000 to the property tax swap proposal. In addition, no more than $50,000,000 of the $350,000,000 MFL may be allocated to the property tax swap proposal which is aimed at providing separate grants to high-taxed low-wealth school districts so they can reduce their local property tax burden. 
  • Chicago’s pension normal cost is removed from the school funding formula and appropriated through the Pension Code. 
  • Beginning in tax year 2017, allows CPS to increase their property tax levy dedicated for pensions up to .567% instead of .383% as is in current law. This increase has the potential to bring $120 million more in local revenue to CPS for pension costs. 
  • Charter school funding parity remains as currently included in SB 1. Charter schools must receive between 97%-103% per-pupil capita tuition charge of the school district. 
Mandate and Property Tax Relief: 
  • Physical Education
    • Replaces daily PE requirement with a minimum of three days per week. 
    • Allows 7th-12th graders to be exempt from PE if they participate in athletics. Current law only exempts 11th and 12th graders. 
  • Driver’s Education
    • Provides that a school district may contract with a third-party offering driver’s education without submitting a mandate waiver request. 
  • Streamlined Waiver Process
    • Creates a four-member Panel consisting of the four legislative leaders to review the State Board’s Mandate Waiver Report each time the Report is submitted. The full General Assembly would no longer have to approve the Waiver Report by resolution. 
  • Property Tax Referendum
    • Provides that a school district that is above 110% adequately funded must put to referendum a property tax reduction question if 10% of registered voters submit a petition.
    • The question must be placed on a consolidated election ballot. 
    • The educational purposes levy may not be reduced by more than 10% under the previous levy year and the district’s adequacy target may not fall under 110% due to the reduction. 
Private School Scholarship Tax Credit: 
  • $75 million scholarship program with a 75% tax credit for all donors. In order for the full $75 million to be credited, $100 million will have been donated. 
  • $1 million donation cap for all taxpayers, including individuals and corporations. 
  • The new language provides that the tax credits shall be awarded in a manner that is geographically proportionate to the statewide enrollment in non-public schools.
  • The Tax Credit Program will be a five-year pilot program. 
  • To be eligible, a student’s family may not exceed 300% ($73,800 for a family of four) of the federal poverty level. In year two, the family may not exceed 400% ($98,400 for a family of four) of the federal poverty level. 
TIF Reform Task Force:
  • A Tax Increment Financing Reform Task Force is created to study TIFs. 
  • Three legislators will be appointed by each legislative leader, with one member from each caucus serving as co-chairs on the Task Force.
  • The Task Force may study, but is not limited to, the following: 
    • The benefits and costs of TIF districts;
    • The interaction of TIF law and school funding;
    • The expenditure of TIF funds; and
    • The expenditure of TIF surplus funds. 
  • The Task Force shall submit its findings and recommendations to the General Assembly by April 1, 2018.

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