School funding stretched thin as costs rise, corporate revenue source
shrinks
[August 08, 2026]
By Peter Hancock
SPRINGFIELD – Despite a $350 million increase in base funding for public
schools this year, Illinois is falling further behind in its quest to
bring all school districts up to adequate funding levels.
That’s according to new data from the Illinois State Board of Education,
which announced Friday the details of how it will distribute $9.3
billion in Evidence-Based Funding dollars for public schools.
For the third consecutive year, the number of districts being funded at
or above 90% of their “adequacy target” will fall while the overall
“adequacy gap” — the amount of additional money it would take to bring
all districts up to full adequacy — will increase.
According to the new distribution figures, only 292 of the state’s 850
elementary, high school and unit school districts will be funded at 90%
or more of their adequacy target in fiscal year 2027, down from a peak
of 327 in fiscal year 2024.
And the overall adequacy gap this year will total $6.8 billion, up from
$4.8 billion three years ago.
State Superintendent of Education Tony Sanders said that’s primarily due
to three factors: rising costs; a decline in one source of corporate tax
revenue; and an increase in the number of students identified as
“low-income.”
Those factors aside, however, Sanders insisted the Evidence-Based
Funding formula is serving its purpose.
“Every school district has received more school funding each year since
EBF was enacted,” he said Friday during a media briefing about the
numbers. “In other words, EBF is working.”
Outside factors
Sanders said one of the biggest factors affecting school funding is a
rapid decline since 2024 in a revenue stream known as “corporate and
personal property replacement tax,” or CPPRT. That’s a tax the state
began levying in 1979 on certain business entities. It replaced a tax on
personal property such as machinery and equipment that was phased out
under the 1970 Constitution.
The revenue is collected by the state but distributed to local units of
government, including school districts, that used to receive personal
property tax revenue. It is used in the EBF formula to calculate how
much revenue a district is able to raise on its own and, thus, how close
it is to meeting its adequacy target.
CPPRT revenue spiked between 2022 and 2024 amid the hyperinflation that
occurred immediately following the COVID-19 pandemic, which was a boon
for school districts that receive that money. But it has dropped
precipitously since then, resulting in many districts moving further
away from their adequacy target, Sanders said.
He also cited rising labor costs as another factor affecting schools.
That includes increases both in the salaries teachers are paid and the
number of teachers employed in Illinois schools.
“This data demonstrates that in Illinois we are paying our teachers
better, which we need to be doing,” he said. “The increases in salary
costs, though, do push districts further away from adequacy.”
Finally, Sanders said, the state started using a new method this year of
counting low-income students in each district. That matters under the
EBF formula, he said, because students from low-income households
typically need more resources and therefore cost more to educate.
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Illinois Supt. of Education Dr. Tony Sanders speaks at the
Governor’s Mansion in Springfield in March 2026. (Capitol News
Illinois photo by Jenna Schweikert)
Moving target
Sanders said the EBF formula is designed to take into account changing
circumstances like rising costs and demographic shifts. As a result,
each district’s adequacy target is always a moving figure.
The net effect of all the changes this year, he said, is that most
districts moved further away from their adequacy target, as did the
state as a whole.
According to the data, the total statewide adequacy target this year —
the total of all local, state and federal revenue it would take to
adequately fund all schools in Illinois — grew $2.4 billion this year,
to $31.5 billion.
“Let me reemphasize, though, that this is how EBF is designed to work,”
Sanders said. “It is responsive to changing resources and increasing
student needs.”
Robin Steans, executive director of Advance Illinois, an education
advocacy group that pushed for passage of the EBF formula in 2017,
agreed that the formula is working and that schools are still far ahead
of where they were before the adoption of EBF.
“There is still more dollars available, particularly for all districts
and for districts that are in the most need,” she said. “And we’re
closing equity gaps as we go. It’s just we got an artificial bump (from
CCPRT) and now that artificial bump is going away.”
But Stacy Davis Gates, president of the Illinois Federation of Teachers
and the Chicago Teachers Union, said in a statement that the figures
show lawmakers need to put more money into the formula above the minimum
$300 million per year called for in the statute just to keep up with
rising costs.
“Today’s report should serve as a wake-up call,” she said. “A child
entering kindergarten today will graduate from a high school that is
still underfunded. Our students are about to report to crumbling
buildings, without the food, special education support, and
transportation that they need to meet the minimum of a functional school
day, let alone the quality school day our students deserve.”
Sanders, however, said he does not intend to ask lawmakers for larger
annual increases.
“The state board of education’s commitment has always been to request
the $300 million that statutorily requested for evidence-based funding,”
Sanders said. “It’s really a function of the General Assembly and the
governor to determine if there’s additional resources that could be put
towards public education. But we will continue our annual ask of $300
million in tier funding every year.”
The other $50 million that’s part of the annual increase goes to
property tax relief grants.
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