LM Feb 2025

serving as a co-facilitator of IASA’s Compliance Plus program, I was the Chief Financial Officer at the Illinois State Board of Education. Here are seven key items every superintendent should understand about EBF: EBF Boils Down to a Simple Ratio EBF has several complex statutory calculations that determine EBF distributions. However, the distribution formula can be reduced to this simple ratio:

The sum of the 34 cost factors is the district’s Preliminary Adequacy Target. The Preliminary Adequacy Target has a regionalization cost factor applied to it and the product of that is the district’s Final Adequacy Target. The range of regionalization factors is 0.90 to 1.05764. Adequacy Targets Continuously Evolve A district’s Adequacy Target will change every year due to changes in student enrollments, the state average teacher salary and statutory required recalibration of Per Student Investment Amounts. The most critical for you as a Superintendent are student enrollments (Average Student Enrollment, English Learners and Low-Income). Increases in enrollments will result in an increased Adequacy Target that on its own will reduce the Percentage of Adequacy. Decreases in student enrollments will result in a lower Adequacy Target which, on its own, will result in an increased Percentage of Adequacy. Understand Final Resources Formula The determination of a district’s Final Resources is where the complexity of the EBF resides. At the basic level Final Resources are: The Base Funding Minimum is the total of EBF Distributions Received in the prior fiscal year. For those districts that received a Property Tax Relief Grant distribution in the prior year, that amount is added to the prior year total EBF Distributions to provide those districts with the dollars that were lost due to the abatement of property taxes to qualify for a Property Tax Relief Grant. The Local Capacity Target is EBF’s formula determination of the contribution to the Adequacy Target that should come from the district’s Equalized Assessed Valuation or property wealth. The Local Capacity Target is the product of the district’s Adequacy Target multiplied by the Local Capacity Percentage. The Local Capacity Percentage is the result of a series of calculations that simply determines where a district stands in relation to all the other districts in the state in terms of property wealth. The range in Local Capacity Percentages is 6 percent to the statutory maximum of 90 percent. The district with a Local Capacity Percentage of 6 percent contributes 6 percent of its Adequacy Target from local dollars in the EBF formula calculations. LOCAL CAPACITY TARGET PERSONAL PROPERTY REPLACEMENT TAXES BASE FUNDING MINIMUM

FINAL % OF ADEQUACY

FINAL RESOURCES

ADEQUACY TARGET

Understanding this simple ratio is all that a superintendent needs to understand and discuss the formula at a basic level as well as being able to forecast what Tier Funding will be in future fiscal years. As data changes, you need to identify if the change has an impact on the numerator or the denominator, which will enable you to understand any change in the Percentage of Adequacy that determines Tier Funding. Adequacy Target is the Sum of 34 Cost Factors A district’s Adequacy Target is the sum of all the statutorily defined 34 cost factors. Those cost factors are in three different designations: Core Investments, Per Student Investments and Additional Supports. To construct the Adequacy Target, ISBE utilizes three student counts. Average Student Enrollment, English Learners and Low-Income Count. Average Student Enrollment and English Learners count is the average enrollment from October 1 and March 1. The low-income count is determined by the number of students as of July 1 that are eligible for at least one of the following low-income programs: Medicaid, the Children’s Health Insurance Program, Temporary Assistance for Needy Families, or the Supplemental Nutrition Assistance Program. All three counts are the greater of the current year’s count or the three year average count. An example of a Core Investment is in kindergarten through third grade — one teacher for every 15 low-income students and one teacher for every 20 non-low-income students. An example of a Per Student Investment is $325 per student for instructional materials. The Additional Investments are investments for Low Income, Special Education and English Learner students. An example of an Additional Investment is an intervention teacher for every 125 low-income students.

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LM Feb 2025