Back-door school subsidies

Oak Park's property wealth brings a bounty of tax dollars to its school system.
(Phil Velasquez/Chicago Tribune)

Some tax-capped districts don't get the subsidies for a variety of reasons. Their real property values may go down, and the regular funding formula would kick in, without any subsidies.

Over the years, the gap between the real and alternate wealth figures widened significantly in some districts.

For example, CPS started out in 1999-2000 with a real wealth figure of about $33.4 billion. Its alternate wealth figure, used to determine state aid, was $31.9 billion.

For state aid this school year, the real wealth figure is $88.1 billion. But the alternate figure is just $51.9 billion, boosting CPS state aid substantially.

At this juncture, the alternate wealth figure has become "an abstraction. It doesn't have any bearing on reality," said Jason Hall, a senior policy adviser at the Illinois State Board of Education.

"We are in a world of shrinking resources," he said. "And the question becomes, is this the best methodology for distributing funds, and are we benefiting the most needy districts the best we can?"

Critics and confusion

A variety of groups have been critical of the subsidies and have pushed for change.

At the very least, the state should be more transparent about the subsidies, said Ted Dabrowski of the Illinois Policy Institute. The fiscally conservative think tank has called for an end to the payments, saying they force taxpayers to subsidize tax-capped districts that refuse to rein in spending.

Dabrowski and others say the formula used to determine the subsidies is so convoluted that most people, even in school districts, can't explain how it works.

"I don't know how they come up with the formula. ... It is not anything we come up with," said Ric King, assistant superintendent over business services for the sprawling Schaumburg-based School District 54. The district got a $1.75 million subsidy rolled into its state aid this year because the state used $4.5 billion as the district's property wealth. The real figure is about $5.8 billion, according to state data.

In Will County's Lincoln-Way Community High School District 210, Assistant Superintendent for Business Ronald Sawin said his district has seen massive retail and residential growth over the years. But in calculating its state aid, that wealth was downplayed by the formula, which gave the district an extra $4.4 million in aid this year.

State education officials broke out the subsidies embedded in state aid for the Tribune, revealing payments of less than $5,000 in 15 districts to more than $1 million in 54 districts.

The 10 districts getting the most money — all with subsidies higher than $5 million — are mostly in west Cook, and two are in Kane County: Aurora West and East districts.

West Aurora School District 129 spokesman Mike Chapin said it would be difficult for the district to do without its subsidy — almost $6 million in extra state aid this year.

"There are revenue streams that we don't get because we're not wealthy enough and we're not poor enough, so it is a real struggle," Chapin said.