Back-door school subsidies
Little-known state program siphons off millions from education budget for select districts, some of them quite wealthy
That kind of local affluence usually means fewer dollars from the state to help cover school bills. But Oak Park Elementary School District 97 also receives millions through a little-known state subsidy aimed at fattening its budget.
Oak Park was among those on the receiving end as Illinois quietly doled out some $6 billion since 2000 to boost state aid for select school districts — many in the Chicago region — that couldn't get more money from property owners because of laws that limit tax collections, the Tribune has learned.
Rolled into the usual state aid sent to districts, the subsidies are all but hidden and have been skyrocketing, starting at $46 million and increasing more than 1,000 percent in the years since lawmakers approved them, state data show. At its peak in 2008, the program cost taxpayers $805 million, with the majority of school districts not getting a penny.
"It is ridiculous," said State Superintendent Christopher Koch. "We can't afford it; it doesn't make sense, and it's not fair to everyone else."
Koch and other critics say the subsidies drain the main pot of state aid that is supposed to be distributed equitably across Illinois.
That state-aid money, more than $4 billion annually in the last several years, has been shrinking amid the state's fiscal crisis. And the subsidies have prompted renewed attention from lawmakers grappling with more potential cuts in education aid.
This school year, the subsidies add up to $502 million for 292 districts, about a third of the state's districts, according to data provided by the Illinois State Board of Education.
The payments often are referred to as "adjustments" to a district's state aid.
To be eligible, school districts have to operate under the state's tax cap laws designed to help control local property tax increases. Of the state's 862 districts, 460 fall under the laws. But not all of them get the subsidies — it all depends on the rise and fall of local property values and a complex state formula that essentially pretends a district is less wealthy than it really is.
That's important because property wealth is key to determining how much state aid districts get. Typically, the less local wealth, the more state dollars per student a district receives.
Chicago Public Schools — the state's most property-rich district, even though most of its students are low-income — gets the biggest subsidy this year, about $283.5 million. To make that happen, the state shaved $36 billion from CPS' property wealth, records show.
Without the adjustment, basic state aid for CPS would have been about $130 million instead of $413.3 million.
Cook County districts as a whole get most of the subsidy money, including districts in more affluent communities such as Wilmette, Evanston, Glenview, Schaumburg and Park Ridge.
Many less financially well-off districts in Cook's south and west suburbs also benefit.
Districts in Will, Kane, Lake, McHenry, Kankakee and DuPage counties get the next highest amounts, according to data examined by the Tribune.
'Relief for the wealthiest'
Local school officials say the subsidies have been a lifeline as districts coped with budget challenges during a tough economy.
Oak Park 97 got the fifth-highest subsidy in the state this year — calculated at $7 million.