LM Aug 2020

HEROES Act vs. HEALS Act TheMost Underappreciated Issue Facing Schools

Ben Boer IASA Director of Research and Data Analysis

While schools are facing an unprecedented crisis in public health and being required to make challenging decisions about the type of schooling our students will receive, they are also facing incredible uncertainty about funding for the coming years. Looking ahead, Illinois, like many other states, could be in a quagmire due to falling revenue. Because the budget approved by the General Assembly in the spring anticipates additional borrowing to close the gap between spending and revenue schools in Illinois are unlikely to feel immediate cuts. Unfortunately, in the coming years, Illinois will likely require federal funding to pay off those debts. This raises questions about whether federal funding will come through, and how it will be distributed. How it all shakes out will have a major impact on schools, how much money they receive and how they receive those dollars—and, therefore, the quality of education superintendents can provide for students in their districts moving forward. The stakes are high. We’re talking about multi-billion-dollar state borrowing that either will be addressed by new federal revenue or be narrowed with future cuts. Unfortunately, the issue of federal support for state budgets hasn’t received the attention it deserves. And some analyses of the conversation have failed to paint the entire picture of the impact of the federal legislative proposals on schools. In this article, I hope to clear up some of the confusion in regard to the different proposals that have been introduced at the federal level by Democrats (HEROES Act) and Republicans (HEALS Act) and provide some context as it relates to school funding. Impact of CutsonSchool Funding In most states, the major part of state funding for schools goes toward equalizing education funding. Since local funding from property taxes tends to be unequal, state formulas provide funding to try ensure that funding is more equal and sometimes even equitable. As this article from

the Urban Institute shows, the degree to which states are able to equalize funding is uneven. Illinois, for example, passed the Evidence-Based Funding Formula to improve its equity, but our state still has much work to do to get to equal (and then equitable) funding for low-income and non-low- income student. Because state funding is used to equalize educational funding, if you cut state funding, you generally are going to hurt low income and minority communities the most. The Urban Institute article shows how different approaches to cutting state funding might have different impacts. In Illinois, our law calls for a per-student cut rather than a cut on a percentage basis. This is a particularly important distinction because the percentage cut that was implemented after the last recession hurt low-income students and property-poor districts significantly. How, during one of the greatest crises our country has ever faced, are we even having a discussion about cutting school funding? While both the Republicans and Democrats have proposed funding for schools, the bills that have been proposed, the HEROES Act, which passed the Democratic- controlled House, and the HEALS Act, proposed by Republicans in the Senate, are quite different. HEROESAct vs. HEALSAct The major difference between the two bills as it relates to school funding is the HEROES Act looks to stabilize state funding which is used for education and provide additional funding for K–12 through Title I, while the HEALS Act only distributes school funding through Title I. It is also worth noting that two-thirds of HEALS funding is dependent on a return to in-person schooling, a decision that should not be made federally. Reading news reports one might get the impression that the HEALS Act provides more funding for schools than the HEROES Act. This is wrong. The HEROES Act provides both state stabilization funding and funding for K–12, while the HEALS Act only provides funding for schools through Title I. The HEROES Act provides funding both for K–12 and continued on page 11...

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LM August 2020