LM Feb 2025

FY 2025 at a Glance

$2.5 Billion is required to move all Organiztional Units to 90% of adequacy

The % of districts with at least 90% adequate funding increased from 22.7% in FY 2018 to 37.3% in FY 2025

Seven out of 10 students are under 90% adequacy

The average % of adequacy for districts below 90% adequacy has increased from 67.1% in FY 2018 to 77.1% in FY 2025

million for Tier Distribution. Tier 1 distributes 50% of the new funds, Tier 2 distributes 49% of the new funds (Tier 1 districts receive a Tier 1 and a Tier 2 Distributions), Tier 3 distributes 0.9% of the new funds and Tier 4 distributes 0.1%. School Districts placed into tiers based on their percentage of adequacy in accordance with statute. Tier 1 districts are those districts with the lowest percentage of adequacy that are below the Tier 1 target ratio. That ratio is the level that allows for a Tier 1 Funding to be distributed by the Tier I funding allocation rate of 30%. Tier 2 districts are districts with a Percentage of Adequacy that are at or above the Tier 1 target ratio (78% in Fiscal Year 2025) but less than 90%. Tier 3 districts are districts with a Percentage of Adequacy that are at or above 90% but less than 100%. Tier 4 districts are districts with a Percentage of Adequacy that are at or above 100%. There are several informative resources available on the ISBE website for EBF https://www.isbe.net/Pages/ EvidenceBasedFunding.aspx.

Local Capacity Target Can Be Adjusted There is an adjustment to the Local Capacity Target when there is a comparison made with Real Receipts. The Real Receipts in EBF are the product of the EBF Equalized Assessed Valuation multiplied by an adjusted operating tax for the school district. When Real Receipts are greater than the Local Capacity Target, the difference is multiplied by the Local Capacity Percentage and the product of that calculation is added to Final Resources. This is important for a Superintendent to be aware of because an increase in an operating tax rate will result in a gain in the Percentage of Adequacy for a school district. Personal Property Replacement Tax receipts utilized in the calculation of EBF are from the calendar year one year before the calendar year in which a school year begins. For example, Fiscal Year 2025 EBF Calculations utilized Personal Property Replacement Tax receipts from calendar year 2023. Understanding How Tier Distribution Works The EBF statute establishes a target for state funding called the Minimum Funding Level of $350 million annually where $50 million is allocated to the Property Tax Relief Grant leaving $300

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LM Feb 2025