Despite New Funding Formula, Some Schools Lose

One promise heard repeatedly during debate over the Illinois’ new school funding plan was "no red numbers," meaning any legislation that would make a district lose money was dead on arrival. Last month, in a rare bipartisan compromise, lawmakers approved a new plan that contained “hold-harmless” protection.

But in a separate action implementing the state budget, the legislature siphoned $297 million from a fund, resulting in a net loss of around 10% for the 22 districts that derive at least 15 percent of their budgets from the Corporate Personal Property Replacement Tax, known as CPPRT.

"Whereas the new school funding formula is awesome, it didn't help us at all,” says Vic Zimmerman, superintendent of Monticello schools.

“We certainly now have huge red numbers, because of the diversion of CPPRT and the estimate of this year compared to last year."

The Illinois Department of Revenue website states that the CPPRT forecast reflects estimates based on “the best available economic data,” and says actual allotments may vary.

CPPRT was created when local units of government gave up their power to tax businesses in 1979. It basically promises local government units, including schools, the same money they got in corporate and personal taxes from corporations back in the 1970s — even for companies that no longer exist. CPPRT isn’t much of a factor  in funding school districts that never had big corporations in their areas. But in areas that had major manufacturing plants in the 1970s, CPPRT is crucial, as Zimmerman can attest.

"I was superintendent at St. Joseph-Ogden before I came here, and we got $30,000 in CPPRT,” he says. “Then I come over here and I see we're getting, you know, $6.5 million, and I'm like: What's this?"

In the 1970s, Monticello was home to Americana Healthcare, Illinois Power, and General Cable. During the height of the cable television boom, General Cable company supplied most of the fiber for the nation, Zimmerman says. Like Illinois Power, General Cable is long gone, but the amount of their tax contributions — frozen in CPPRT — added up to 40 percent of Monticello Schools’ budget.

A few years ago, the General Assembly began dipping into the CPPRT cookie jar and using small amounts to cover other costs. This year, the budget bill scooped almost $300 million to pay a variety of agencies including community colleges ($103.5 million), court reporters ($86 million), the Department of Revenue ($33 million), state-mandated county officers, such as State’s Attorneys ($27 million), Regional Offices of Education ($18 million), the property tax appeal board ($5.5 million), the state board of elections ($3 million), and the Illinois Labor Relations Board ($1.8 million).

Zimmerman says the state actually overpaid CPPRT a few years ago, which helps soften this year's cut. The net result for Monticello Schools is a loss of about $900,000, he says. On a per-pupil basis, his district already spends well below the state average, thanks to a lower-than-average percentage of students in poverty. Despite the cut, Zimmerman says his district will find a way to plug the hole.

“It’s always sunny in Monticello,” he says, “regardless of the weather.”