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EBF Making a Difference Revisiting the Series Click here to read past stories

IASA is taking a different approach to Making a Difference this month. Instead of telling the story of two school districts, we want to share a recent report by S&P Global about Evidence-Based Funding and the impact it has had on school districts’ credit ratings. This report is intended for S&P subscribers and therefore cannot be shared broadly. The following is a summary of the report. Illinois’ Evidence-Based Funding Has Improved School Districts’ Credit Quality And Stability Key Takeaways:

• Since EBF’s enactment six years ago, rating trends have shifted markedly, with twice as many upgrades as downgrades for Illinois school districts. • Cuts to state funding are still possible should the state’s recent trend of financial improvement reverse, which would reintroduce uncertainty and potential budgetary pressure for districts.

• Illinois’ funding of K-12 education has increased substantially since the 2017 enactment of the Evidence-Based Funding (EBF) formula, supporting higher credit quality for Illinois school districts that have prudently managed these additional funds following years of stagnant and prorated state aid under the prior funding mechanism, General State Aid (GSA). • EBF’s hold-harmless provision lends greater stability to budgeting as it means enrollment declines should no longer result in reduced state aid.

History of Illinois School District Rating Changes

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FY 2018–24

Ratings changes (no.)

Fiscal year end, 06/30

32 LM October 2023