Illinois School Funding Reform Commission – Working Group Notes
TOPIC: Hold Harmless
DATE: 12/27/16
Commission Members and Staff in Attendance
- Rep. Bourne
- Rep. Crespo
- Rep. W. Davis
- Rep. McAsey
- Sen. McConnaughay
- Secretary Purvis
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Colleen Atterbury
Jessica Basham
Nicole Besse
Mike Hoffmann
James O'Brien
Gerson Ramirez
Sara Shaw
Bob Stefanski
Stakeholder Groups Represented
- Advance Illinois
- EDGE
- ED-RED
- HSDO
- IASA
- IASBO
- LEND
- SCOPE
Guiding Questions
 How long?
 For whom?
 On what basis?
 With how much money?
Meeting Notes
 Goal of working group is to come to the larger group with a recommendation
o On whether or not we should have a hold harmless
o If so, for how long? Should certain school districts have one and others not? On what basis?
With existing money or new money?
 Difficulty of making hold harmless decisions when they are so contingent upon what kind of formula
the Commission will recommend and whether it will use existing money or only new money
o Overlap with the distribution model working group
o Overlap with property freeze question
 Update on Evidence-Based Model (EBM) language
o Dr. Jacoby reported sending ISBE revised draft language 1.5 weeks ago
o Addressed clarification questions on defining the adequacy targets and determining operating
tax rates
o Request for Dr. Jacoby to bring to the next meeting different runs of the numbers depending
on how much money is put into the model
o What happens if no new money is put into the system?
o As written, no new money put into EBM will result in the status quo maintained
o Hold harmlesses may need to be applied differently depending on whether new money enters
or not
o Legislators will be looking for whether their districts lose money or receive less money
o Starting premise of EBM was for no one to lose money
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Under EBM distribution model, funding cuts may result in redistribution of money
Under EBM distribution model, funding cuts may result a school district being cut under its
current level of funding – as can occur in the current formula under proration
o Distribution model in current EBM language protects districts farthest from adequacy (Tier I
districts) in case of any funding cuts
o Hope that there will be no cuts, but mechanism exists in case of crisis
o Request for Dr. Jacoby to also show what the numbers would look like if there were cuts
Governor will be looking for an increase in education money; ultimately General Assembly determines
what to put forward
o Still, need to plan for if there is a dip in the future
Desire to see how hold harmlesses work in other models besides EBM
o Deep dive at next meeting into the current formula, SB231, and EBM on the different hold
harmless mechanisms
Potential of phasing out hold harmlesses
o Need to discuss the difficulty of phasing out
 Simply admit that it will be in perpetuity because of the political difficulty of reversing?
 How much money would we gain from phasing it out, given how little money the
highest income districts receive from the state? Is it fair to have taxpaying citizens
who receive no state aid?
o Base it on per pupil or per district?
o If the hold harmless is a floor of minimum support that we guarantee to all school districts, it
shouldn’t go away. May be a different story if it is serving a transition function from one
funding system to another where adequacy is defined differently.
o Recent EFAB report raised the recommended foundation level up to above $9000 per pupil
o Once have new adequacy targets differentiated by school district and have taken into account
local effort, there will be the perception that some school districts are gaining or losing money
from the state because some districts will be farther away from adequacy and will need more
aid. OK if we want to take that on, but it is a political question. Commissioners have to decide.
o If districts are going to lose money, legislators want something to offset that lost money – e.g.,
reduced mandates, third party options. Makes it easier for districts to accept, if reticently
 If they are willing to give up money in exchange for other gains, that could affect
whether a hold harmless is permanent or not
o Still a trust issue: anything we say could be held against us
Summary: idea of a hold harmless and how it would occur is not as simple a question of whether we
will or will not have it
o Need to see the implications in three different models
o Monetary losses may be acceptable for school districts if legislators can bring back other kinds
of wins – but not consensus on that point
o Next week’s meeting: seeing how hold harmlesses work in other models and what the effects
are
Desire to better understand the impact of per pupil vs. per district hold harmless
o Per pupil will yield more money to redistribute and more fairly represents actual district costs
o EBM base funding minimum is based on enrollment
o Request for Advance Illinois to help show how SB231 answers these and other hold harmless
questions
o Desire to specifically discuss more fixed costs of districts. Want to see actual school district
budgeted and how they determine their costs. Could mean other options:
 Per district for a while that phases to a per pupil
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Rolling time frame under which school districts would have a district-wide hold
harmless, but if it is a continuing trend of enrollment loss, eventually the hold
harmless takes that into account
o Any hybrid hold harmless could be problematic for school districts increasing in enrollment,
important for considering rural school districts
 Has any other state ever done a hybrid hold harmless model?
o Similar questions apply in talking about transportation, where the fixed costs become very
high
 CPS used to have a small school supplement specifically because of the high fixed costs
for small schools
 But also do not want to reinforce bad behavior whereby a district maintains overhead
costs when actual per pupil costs are decreasing
o Another component of per pupil is how to count the pupils
 Current ISBE model uses the greater of either the 3-year average or the current year
(out of the best 3 months of attendance). Helps growing school districts get resources
immediately while diminishing SDs have their losses slowed
 Request to Dr. Jacoby and Advance Illinois to add this element to the comparison of
the three models
o One priority can be that the money follows the student
Danger of losing sight of the big picture, of the need for a new system with better and better funded
schools that will ultimately benefit the whole state
o New system also dependent upon the amount of money put in
Overlapping issues on impact on school districts: tax freeze, cost shift, mandate relief
o Difficulty in articulating exact mandates from which want relief
o Mandate relief working group report coming to next full Commission meeting
o Special education mandate relief is not currently on the table, but superintendents and the
State Superintendent have been vocal about the relief it could bring.
o Value of mandate relief may ultimately be less in cost savings and more in gained flexibility
Other concurrent issues
o Recent EFAB report
o True costs of EBM (i.e., currently down from $5 billion to $3.7, $3.8 billion)
o What a ramp to adequacy could be: if everything else were to stay equal, what would it take
over what period of time so that all of our school districts are funded up to 90% adequacy?
o Possible inequity in state support in pensions – not solely in the Chicago Public Schools
pension vs. block grant tension, but more generally on the dependency of pension
contribution on average teacher salary
Relationship between working groups and full Commission meeting
o Working groups make recommendations to full Commission. Full Commission votes on
whether to include those recommendations in the final framework submitted to the Governor
on February 1
 No decision made in working groups that is not brought to the larger group
o Ideal framework will have all 25 Commission members’ signature on it. If not everyone agrees,
they can decide whether to put their name on it or not
o Shared membership between the working groups and the full Commission will ensure the
interconnectedness of the working group topics
o New agenda item added to each full Commission meeting: reports out from the working
groups for the first hour
o Initial point person volunteers
 Nicole Besse
 Dane Thull
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