You may be surprised to learn that thousands of people in Illinois are “unbanked,” meaning they don’t have any sort of bank account — no checking, no savings. They often have to pay fees to cash their paychecks, pay higher interest rates on loans and have a harder time saving money. The Bank On Illinois program partners with banks and credit
unions across the state to offer safe and low-to-no fee accounts.

Having paychecks, benefits and other payments directly deposited into your account is safer, there’s no risk of the check getting lost in the mail, and no check-cashing fees.

Reasons people may not have a bank account include an overall distrust of banks and high fees or a high minimum deposit required to set up an
account. Low-income and minority adults are the most likely to be unbanked.

The Bank On Illinois Commission is under the purview of the Illinois Office of Comptroller, and Comptroller Susana Mendoza serves as the chair. It’s made up of elected officials, state regulators, community groups, banks and credit unions. Learn more at: illinoiscomptroller.gov/bank-on,
where there is an interactive map that shows where Bank On Illinois products are available. You can even search by ZIP code

BY THE NUMBERS was originally published in Fiscal Focus on Medium, where people are continuing the conversation by highlighting and responding to this story.

Transfers and deposits into the Budget Stabilization Fund through the first 10 months of fiscal year 2026 totaled $96 million, compared to $183 million through the first 10 months of fiscal year 2025.

The largest difference between fiscal years is the $45 million from the Unemployment Insurance Trust Fund that was deposited into the Budget Stabilization Fund in July 2024. This deposit was implemented under a December 2022 law requiring that the repayment of a $450 million interest-free loan to the trust fund to address COVID-19 expenses go to the Budget Stabilization Fund. The 2025 deposit under this law was made in June 2025, resulting in $90 million in unemployment insurance deposits for fiscal year 2025, double the expected amount.

Additionally, the fiscal year 2026 budget implementation bill paused the monthly $3.75 million transfer from the General Revenue Fund through June 2026, resulting in a decrease of more than $37 million through the first 10 months of the fiscal year compared to the first 10 months of fiscal year 2025. The fund continues to receive 10% of adult use cannabis sales revenues each month. Through April 2026, recreational cannabis sales collections decreased by about $1 million compared to the first 10 months of fiscal year 2025.

Investment income deposited into the fund declined by about $4 million through April 2026 compared to the first 10 months of the previous fiscal year. This is mainly due to the six cuts totaling 175 basis points made to the federal funds rate by the Federal Reserve Board’s Federal Open Market Committee (FOMC) between September 2024 and December 2025. Of note, at its December 2025 meeting, the FOMC was without key economic data reports from October 2025, including the consumer price index, unemployment, and real earnings, which were not collected due to the 43-day federal government shutdown between October and November.

According to the most recent data provided by the National Association of State Budget Officers in December 2025, Illinois ranks 48th out of 50 states in the number of days it could operate state government on just its Rainy Day fund (just 15.6 days), even though Illinois’ Rainy Day Fund is at its strongest balance since its creation. Meanwhile, the national median is 47.8 days, and the national average is 60.0 days.

For more information, visit the IOC’s Rainy Day Fund webpage.

IOC Stays on Top of Paying GRF Bills, Oldest Voucher at 14 Days to End April

At the end of the day April 30, the oldest General condition of the state and the hardships faced by Revenue Fund voucher at the IOC was 14 business days. This chart shows the changes to the GRF payment cycle over the past several years, beginning with fiscal year 2017, when the state was mired in what would become a period of 736 days without a budget, which ended July 6, 2017.

In addition to the General Funds accounts payable, the oldest GRF voucher at the IOC has been an important method of assessing the current financial condition of the state and the hardships faced by state vendors since September 2001, when a worsening economy began a consistent rise in the bill backlog. Steady improvement has been made to the bill payment cycle since December 2017, and today the payment cycle is within 30 days for vouchers sent to the IOC.

This payment cycle does not apply to pending net interfund transfers at the IOC.

RAINY DAY FUND CONTINUES RECORD GROWTH was originally published in Fiscal Focus on Medium, where people are continuing the conversation by highlighting and responding to this story.

Changes to Illinois unemployment laws normally consist of two items to help maintain a healthy fund balance: changing employer contributions or changing benefit amounts. While employer contribution rates can vary year-to-year based on statutory formulas, benefit amounts are generally provided via statute and can be amended when needed to help keep the Fund solvent.

For example, after the State required advances from the federal government to pay out benefits during the COVID-19 pandemic, Public Act 102–1105 set new maximum wage bases to calculate benefits and additionally increased the target balance of the Fund from $1 billion to $1.75 billion to ensure that the Fund would have enough money to pay out benefits should there be another economic downturn (the Fund’s actual year-end balance compared to the target balance is one factor used by the Department of Employment Security when determining employer contribution rates).

In the past, prospective benefit decreases and tax increases have been placed into statute as “speed bumps.” This encourages interested groups to negotiate and enact changes in a timely manner. If the Fund is healthy and no changes are needed the “speed bumps” are extended and can be addressed in future negotiations. This can be seen in Public Act 103–1059, which delayed automatic benefit cuts and contribution increases from 2025 to 2027.

This process has generally helped lead to stability in the Fund, as the Fund has been above its new target balance since 2024. Revenues, expenditures, and the fund balance have generally met projections (excluding unseen events such as the Great Recession or COVID-19 Pandemic).

As evidenced by the charts below, projections for the Trust Fund’s balance from 2022 are in line with the actual net balance. Although recent political and geopolitical events have made forecasting more difficult, the current UI Trust Fund projections show the fund remaining relatively healthy. If pessimistic projections do play out action may be needed to keep the fund solvent.

UNEMPLOYMENT INSURANCE TRUST FUND was originally published in Fiscal Focus on Medium, where people are continuing the conversation by highlighting and responding to this story.

On October 31, the Illinois General Assembly approved a $1.5 billion rescue package aimed at stabilizing funding for the state’s mass transit systems. The legislation is in response to a projected $1 billion budget deficit facing the Regional Transportation Authority (RTA), Chicago Transit Authority (CTA), Metra commuter rail, and Pace Suburban Bus Service.

The financial crisis stems from the expiration of federal COVID-19 relief funds that had supported public transit agencies during the pandemic. Between 2020 and 2021, the federal government allocated $30.5 billion nationwide to offset declining ridership and revenue across public transit networks. Illinois received approximately $3.3 billion from that total — distributed as $912.1 million for CTA, $513.5 million for Metra, and $71.2 million for Pace. With those funds expiring at the end of 2025, transit agencies warned that up to 40% of their services could be cut without new support.

Governor J.B. Pritzker signed the rescue legislation, Senate Bill 2111, into law on December 16, 2025. The bill provides an estimated $860 million annually for public transit by redirecting state sales tax revenue generated from gasoline purchases. An additional $200 million per year will be diverted from interest collected through the State Road Fund, which typically finances road construction projects.

Taking effect June 1, sales tax for the RTA will increase by 0.25% to a 1% tax in the collar counties and a 1.25% tax in Cook County, and tolls in northern Illinois will go up by 45 cents. The sales tax increase is expected to bring in $478M, while the increased tolls will bring in $1B annually and be diverted to fund a new tollway capital program.

The bill also bans using operating funds for capital projects. The provision is in response to a proposal by Metra to use $60 million in operating dollars on capital projects that sparked lawmaker concerns about long-term financial stability.

A key provision of SB 2111 establishes the Northern Illinois Transit Authority (NITA), a new governing body that replaces the RTA as the oversight agency for CTA, Metra, and Pace. NITA will consist of a 20-member board, signaling a major governance shift in how Illinois’ largest transit systems are managed and funded. NITA will have stronger oversight of the transit system with the ability to establish a universal fare system and coordinate scheduling between the three service agencies.

The 20-member board will have representation from each impacted county, with five appointed by the mayor of Chicago, five by the Cook County Board president, five by the governor and five collectively by Lake, McHenry, DuPage, Kane and Will counties. That makeup has drawn criticism as being imbalanced with some suburban leaders concerned about their ability to affect public transportation decisions.

Other provisions in the bill seek to address public safety concerns on transit systems through a law enforcement task force. A transit ambassador program is also created to deploy trained, unarmed personnel by July 2027 to provide customer service, de-escalate conflicts, and liaise with social service providers to address homelessness and mental illness issues.

Downstate transit stands to benefit as well. Several key provisions in the legislation offer increased access to jobs, education, healthcare, shopping, and vital services for vulnerable populations down state through policy changes removing barriers and interagency coordination. Notably, the legislation provides downstate agencies with $220 million in new funding and reduces local match requirements to access Downstate Public Transportation Fund dollars.

Despite the broad support from political and civic leaders, the legislation faced resistance from labor groups. The Illinois Laborers’ Union voiced opposition to reallocating money from the State Road Fund, arguing that the policy could drain millions annually from construction projects vital to both Chicago-area and downstate communities. The union also criticized the lack of transparency in legislative negotiations, claiming that the AFL-CIO did not adequately communicate the proposed changes. In response, the Downstate Laborers announced their decision to split from the AFL-CIO.

However, following the bill’s enactment, several major labor organizations — including the AFL-CIO, the Chicago Federation of Labor, the Machinists International, the Chicago and Cook County Building Trades, the Amalgamated Transit Union (ATU) International, and IUOE Local 150 — publicly endorsed the new law, citing the importance of keeping the 15,000 employees of the transit system on the job.

Governor Pritzker’s office framed the measure as essential to preserving equitable and sustainable transit access across the Chicago metropolitan area and northern Illinois. The law’s passage marks one of the most significant state-level interven tions in public transportation funding in recent years, positioning Illinois as a leader in rethinking post-pandemic transit reform.

ILLINOIS APPROVES $1.5 BILLION RESCUE PACKAGE FOR MASS TRANSIT was originally published in Fiscal Focus on Medium, where people are continuing the conversation by highlighting and responding to this story.

Volunteers working countless hours responding to calls about animals in need, shelters struggling to keep up with the rising cost of care, and a steady supply of homeless dogs and cats…it’s often over whelming on the best of days. This puts a strain on the people facing troubling cases of neglect and abandonment, and on municipalities funding animal control programs.

Shelter Animals Count, a program under the American Society for the Prevention of Cruelty to Animals (ASPCA), is one of the leading groups collecting data about shelter pets across the country.

In their latest report, they found that 5.8 million dogs and cats entered shelters and rescues across America in 2025. That’s a 2% decrease (121,000 fewer animals) from 2024. Shelter Animals Count says last year, 59% of community intakes continued to be driven primarily by stray animals. 30% of animals were surrendered by their owners.

Nationally, 597,000 animals were euthanized in 2025. Of those, 54 percent were dogs; 46 percent were cats.

The report also looked at which animals are being adopted.

“As rescues and shelters, we are working together — doing our part and often far beyond it. Our facilities are full, but our work does not stop. We will never stop advocating for the voiceless, for their protection, their health and well-being, and their chance to live.” –Tiny N Tall Rescue, Inc. in St. Charles

In Illinois, community intakes held steady at 118,453 entering the system in 2025. Another 45,634 were transferred into Illinois shelters and rescues, often from out of state. There was a 3% increase in “non-live outcomes” last year, with 16,425 either euthanized or dying for other reasons in care. The good news is there was a nearly five percent increase in “live outcomes,” meaning the dogs and cats were adopted or were reunited with their owner.

Where are the animals coming from?

According to Effingham County Animal Shelter and Control, “most animals come from owner surrenders, strays, or animals found abandoned. A common situation leading to homelessness includes lack of access to affordable veterinary care, unplanned litters, housing restrictions, and owners underestimating the long-term commitment of pet ownership.”

The Champaign County Humane Society has a similar take. “Because of the type of shelter we are, most of our intakes are owner-relinquishments due to various circumstances. Sometimes financial, sometimes lack of time, sometimes various life events, like divorce, job change, old age, etc.

Kristen Castro, shelter manager for Orphans of the Storm in Deerfield says about 50% of their animals come from city and county animal control. Orphans of the Storm, like many other shelters, work closely with municipalities, reviewing pets for adoptability and seeing if they can help with medical or behavioral needs in hopes of finding the pet a new home. She says another 25% come from out-of-state rescue partners and the remaining 25% are owner surrenders.

Funding

Local animal control costs are funded in a variety of ways such as direct budget appropriations, special revenue funds and proceeds from licensing fees, rabies tags and other fees. Some small towns contract out for animal control, paying the county or a local private shelter for services.

Shelter Animals Count found that nationally, 47% of dogs and cats enter the system initially at government shelters.

“Our shelter is continually overwhelmed with homeless pets. While there are periods that are slightly more manageable, overall if feels like a constant and ongoing challenge.”–Effingham County Animal

Many local governments are grappling with budget deficits. Pike County faced a $1.8 million shortfall, and in November, there was talk of cutting the county’s animal control budget. That led to the Pike County Animal Shelter posting on Facebook: “This is the most challenging post we have ever had to write. The Pike County Animal Shelter in Pittsfield, Illinois, is facing an unprecedented crisis. Due to a sudden and devastating loss of funding, we are in a desperate situation: if we cannot find forever homes for many of our beloved residents immediately, we will be forced to consider euthanization.”

The final budget did include cuts, but not as severe as initially thought.

Sometimes, unexpected needs arise and government shelters must turn to the public. Such is the case for Sangamon County Animal Control, which took in 15 dogs after a suspected dog fighting ring was discovered in Springfield this January. Many of the dogs had been abused and tortured and came to them with serious injuries that needed treating, including one missing a portion of its jaw. The group, Friends of Sangamon County Animal Control, asked the public for donations toward his medical care.

Trends

The shelters we talked to noted several trends, some that have always been a problem, such as families getting new pets for Christmas and realizing they aren’t up to the task of animal care. A recent trend seen in Illinois is a drop in the adoption of large dogs, often because of housing restrictions or the overall cost of caring for a bigger animal.

The economy is also affecting adoptions. The Champaign County Humane Society says “Dog adoptions are slow due to an overall decrease in interest in dog ownership — largely due to costs associated with vet care, housing, etc.”

Chicagoland Animal Rescue, which only deals with homeless cats, cites a trend they are seeing, “We don’t have the data to support it, but it truly feels as if there is a tremendous cat population explosion.”

“We are continually asked to take in owner surrenders and found cats, but since we are foster based, we are severely limited by the number of foster homes available. This in turn can make people feel very frustrated in their attempts to help cats, and we often have that taken out on us.”–Chicagoland Animal Rescue

And Effingham Animal Control explains what they have noticed. “We have seen an increase in dumped animals as well as an increase in owners surrendering their own pets. Unfortunately, many people are dishonest and claim they “found” the animal rather than admitting it is their own. Intake continues to rise while adoptions fluctuate, putting added strain on available space and resources.”

Midwest Australian Shepherd Rescue is a breed specific group. “Since COVID, we have had a significant number of rehoming requests due to financial difficulty. We have also noticed a large increase in the number of strays that seem to be purebred Aussies needing placement in our program. The backyard breeding of Australian Shepherds has also increased significantly, so we have seen an increase in dogs that are beautiful aesthetically but have poor temperament or that have even been in bred with medical problems and severe behavioral problems. Australian Shepherds have become very popular in the past 10 years as well.”

“The increase in dumped dogs, strays and people needing to give up their dog is astounding.” –Midwest Australian Shepherd Rescue

An article in Forbes raised another concern… beloved pets having to be surrendered to shelters and rescue groups because of deportation. In some cases, one family member is deported, and the rest of the family goes with them but can’t take their pet. Or pets are being left with others who can’t provide or afford proper care. Taking a pet into another country can’t be done on the spur of the moment. A medical exam and health certificate is required, and other countries have their own rules and regulations.

Many of these issues are common across the country. “Nationally, large dogs can have a harder time getting adopted than small or medium dogs. Cost of care for pets is increasing, and there are potential housing barriers with larger animals, such as size limits and breed restrictions. It’s not only landlords and management companies, but some homeowners’ associations have requirements as well. We have also seen an increase in the number of pets coming into shelters that have not been spayed or neutered, which adds to the strain of shelters and rescues to provide additional resources for pets in their communities,” Tori Fugate, Director of Communications for Shelter Animals Count at the ASPCA said.

Solutions

Most shelters and rescue groups say more low-cost spay and neuter programs are needed throughout the state to help slow the tide of homeless animals. That’s the number one point most often stressed. Chicagoland Animal Rescue says, “there needs to be a state and nationwide push for spay and neuter for found and owned pets alike, and to stop backyard and unwanted breeding.” There are currently no Illinois or federal laws mandating spaying/neutering.

Jill Egizi with WILD (Women in Love with Dogs) Canine Rescue in Springfield agrees, but points to an overall troubling issue “obviously spay/neuter is one answer to this crisis, but backyard breeders who breed puppies that that have no buyers and people recklessly abandoning their animals due to lack of commitment is a major problem. To be clear, this really has nothing to do with ‘Covid Puppies.’ It has to do with the mindset that everything is disposable. We see owners surrendering animals that have lived on their couch since the age of eight weeks. Some of these dogs are senior dogs that have lived an entire lifetime with a family and are recklessly discarded at kill shelters with an unknown fate.”

“Today, pet adoption in Illinois and across the U.S. is in peril. We are fighting a losing battle right now and trying to combat over population issues in every county shelter, private shelter and rescue nationwide. We are working as hard as we can, 72 hours a day to try to save dogs and as much as we try, the reality is we can’t save them all.” –Jill Egizi, WILD Canine Rescue in Springfield

Other solutions include a more concerted effort to get potential pet owners to “adopt not shop.” It’s not just about emptying shelters but also concerns about unscrupulous breeders who favor profit over the health of the dog. Overbreeding, poor conditions for the animals, and selling puppies as purebred without proof or selling them too young still happens too frequently.

In the same vein, those dead set on a certain breed may not want to rush right to a breeder. There are many breed-specific organizations like Midwest Australian Shepherd Rescue, as well as German Shepherd Rescue, Inc. in Skokie and Collie Rescue of Greater Illinois, and purebreds do end up in shelters sometimes.

Continued partnerships between municipalities, local rescue groups and businesses are also vital, as they work together to evaluate, treat and even train the animals in hopes of finding them the best home possible.

Advocates also point to the need for:

• More affordable veterinary care, subsidized vaccine programs and pet food banks
• Public education about the lifetime commitment of owning a pet
• Free microchipping clinics and lost pet databases
• Recruiting more foster families willing to temporarily take a pet
• Breeder and pet sales regulations, such as limits on high-volume breeding

Want to help?

Shelters and rescue groups need all sorts of help. Volunteers are always needed to help at adoption events, to foster the animals, work fundraisers, walk and train the dogs at local shelters, hang out with the cats, update websites and social media pages, and in the case of WILD, to work in their thrift store, WILD Thrift & Sniff in Springfield. The upscale thrift store opened in June 2024, accepting donations and offering everything from furniture and home decor to clothing and wedding dresses.

Donations are welcome at most shelters as well, with shelters requesting everything from dog and cat food to leashes, toys and blankets. Some, like Midwest Australian Shepherd Rescue have Amazon wish lists for those wanting to donate.

And of course, monetary donations are greatly appreciated to help cover things like veterinary care, shelter and rescue operations, and even new buildings, like Orphans of the Storm’s planned adoption center.

Tiny N Tall Rescue has come up with a neat idea for raising money — monthly memberships ranging from $5 to $75 a month, covering things like a new toy or a vaccine. But the group also says, “Donating your time can be just as lifesaving. We are a 100% foster-based rescue, which means we can only save the lives we have foster homes for. When you open your home, you open the door to a second chance.”

There are so many ways to help, and shelters appreciate every dollar and volunteer.

As you read this, a dog is suffering outside on a heavy chain, with very little human contact, through storms and cold. A litter of kittens is hiding in an alley, starving and unnoticed. A dog who has spent its whole life with their family is suddenly dumped along a road, wondering why they were abandoned. A pet waits in its shelter kennel for months to finally find their forever home.

“The greatness of a nation and its moral progress can be judged by the way its animals are treated.” — Mahatma Gandhi

Yet also as you are reading this, there are rescue volunteers working all hours of the day to respond to cases of abuse, having to live with horrific images in their minds but still pushing through because of their love for animals. These caring angels are tired but determined.

Hopefully there is also an individual or a family, thinking about getting a pet and choosing to visit their local shelter in search of their new best friend, looking into the eyes of the precious souls waiting to be loved and ultimately deciding to take one home.

FINDING FOREVER was originally published in Fiscal Focus on Medium, where people are continuing the conversation by highlighting and responding to this story.

This was due in part to the passage of balanced budgets, building of reserves and Illinois Comptroller Susana Mendoza’s hard work in paying down a massive $17 billion backlog of bills that amassed during the 2015–2017 budget impasse.

Fast forward to 2025… Just this past October, Comptroller Mendoza announced Moody’s Ratings agency granted the state its 10th credit upgrade.

In its latest upgrade, Moody’s cited the state’s Rainy Day Fund, which grew from $48,000 to more than $2.4 billion on Mendoza’s watch, saying “Illinois continues to add to its reserves and fund balance, growth in which is a crucial element in mitigating risks associated with the state’s high leverage, as well as shifts in federal policy.”

The Rainy Day Fund is a crucial component of the state’s overall fiscal health. It’s only meant to be used in times of extreme emergency such as a major recession or another global pandemic. Comptroller Mendoza has continually pushed for legislation requiring more regular payments into the state’s Rainy Day and Pension Stabilization Funds.

When it comes to the Rainy Day Fund, it’s undeniable that Illinois has made significant strides. But compared to other states, we are still behind. Our current balance would cover state operational costs for about 16 days. Most states currently have more than 47 days saved up, down from 49 days in Fiscal Year 2024.

Other factors leading to upgrades over the last 10 years include transparency efforts initiated by Comptroller Mendoza. She championed the Debt Transparency Act, which became law in 2017, requiring state agencies to report bills they haven’t yet submitted to the Comptroller’s office for payment. This continues to give the state — and the public — a more accurate look at bills that will need to be paid. In S&P’s rating upgrade in February 2023, they cited “transparent reporting both from the comptroller and the governor’s office of management and bud get that we expect will be sustained or improved.”

Since the DTA became law, Comptroller Mendoza has made transparency the hallmark of her administration. Several data sets, reports and portals are available online at: Illinoiscomptroller.gov.

10TH CREDIT RATING UPGRADE was originally published in Fiscal Focus on Medium, where people are continuing the conversation by highlighting and responding to this story.

Right in the heart of Chicago’s West Side, the North Lawndale Employment Network (NLEN) has been helping people find opportunity since 1999. What started as a small, community-led effort supported by the Steans Family Foundation has grown into a leader in workforce development, reentry services, and social enterprises.

After years of searching for the right home, NLEN is now permanently located in what was once the Community Bank of Lawndale, the neighborhood’s first Black-owned bank. The building’s history adds meaning to the work happening inside it today. Under the leadership of President & CEO Brenda M. Palms Barber, NLEN focuses on job readiness training, transitional employment, industry-specific skills programs, and financial support that help residents move forward.

NLEN serves unemployed and low-income residents of North Lawndale and has a proven track record of helping individuals secure employment within one year. But the work doesn’t stop there. Through partnerships like their on-site Wintrust Bank, NLEN has helped hundreds of individuals open savings and checking accounts, giving them the tools to build financial stability and work toward sustainable 12 futures.

In 2024, NLEN launched Sweet Beginnings, a social enterprise created to help men and women with criminal backgrounds gain hands-on job training and three-month transitional employment while producing beelove®, a line of raw, natural Chicagoland honey. Today, beelove® manages apiaries across the Chicago area, including locations at Roosevelt University’s Schaumburg Campus, O’Hare Interna tional Airport, the Cook County Trailside Museum, and right at home in North Lawndale. Sweet Beginnings became NLEN’s first award-winning social enterprise, earning The Chicago Neighborhood Development Award in 2012, the Illinois Governor’s Sustainability Award in 2014, and The Impact 100 Award in 2015.

In 2021, NLEN expanded with the opening of bee love® café which was built on the success of Sweet Beginnings. The café is a warm, welcoming space where the community can gather and enjoy coffee and specialty drinks made with beelove® raw and natural honey, along with locally made pastries and tasty lunch options. While customers are enjoying their drinks and treats, they have the opportunity to learn about the programs that are helping North Lawndale grow and thrive.

NLEN, Sweet Beginnings, and beelove® café together tell a story more than twenty years in the making. It’s a story about second chances, meaningful work, and a commitment to building a stronger, more connected North Lawndale.

NORTH LAWNDALE EMPLOYMENT NETWORK & BEELOVE was originally published in Fiscal Focus on Medium, where people are continuing the conversation by highlighting and responding to this story.

Hello and happy summer!

I am excited for this year, my final year in office, and all the good work and progress I still want to accomplish. I am tackling this year like I always do: full speed ahead and with plenty of positivity.

This will be a challenging year for sure, so I must also stress caution. Threats to federal funding seem to arise and change daily, causing so much unnecessary uncertainty and stress for Illinoisans who rely on vital services and the providers caring for our most vulnerable.

As the finishing touches are put on the new budget, I urge legislators and the Governor to keep in mind how far we have come in recent years. Illinois has made so many great strides, including 10 credit rating upgrades and more than $2.4 billion in the state’s Rainy Day Fund. We are attracting business and families to our great state but can do so much more.

In this issue of Fiscal Focus, I hope you enjoy an update of the current status of state finances, as well as a fun look at the history of the penny and what the end of production of the one cent coin means for all of us.

We also examine pet adoption in Illinois and the never-ending work being done to find homes for unwanted pets. We review last year’s overhaul of mass transit in Illinois, and the North Lawndale Employment Network’s beelove® initiative, creating jobs and delicious honey.

I hope you find this issue interesting and informative and urge you to follow the Illinois Office of Comptroller on X, Facebook, Instagram, TikTok and Bluesky. Happy summer, and happy reading

LETTER FROM THE COMPTROLLER was originally published in Fiscal Focus on Medium, where people are continuing the conversation by highlighting and responding to this story.

After more than 200 years, it’s coming to an end.

The penny. The one cent coin. The change at the bottom of your purse or in between your couch cushions. The money that lies hopelessly on the street because no one wants to make the effort to pick it up or even flip it over for good luck.

The penny has lost respect over the years. You can’t buy a gumball for a penny anymore and kids scoff at the thought of collecting measly pennies in their piggy banks. It’s been many decades since the Tooth Fairy even dared to leave pennies on a child’s pillow.

So, it’s kind of sad that eventually we may never ask again for “a penny for your thoughts?” or wisely tell our children, “a penny saved is a penny earned.” We won’t ask anyone for their “two cents worth” or say something “costs a pretty penny.”

The penny was one of the first coins produced by the U.S. Mint when it was created in 1792, but on November 12, 2025, the Mint produced its last penny. Pennies are still in circulation, but save for a few collector’s versions, no new ones will be produced.

Land of Lincoln

Of all 50 states, dropping the penny hurts most in Illinois, where we treasure our connection to President Abraham Lincoln. His face adorns the front of the penny, and his memorial is featured on the back of pennies minted through 2008.

Twenty-five years ago, on the fictional White House drama The West Wing, Deputy Sam Seaborn listed all the reasons the penny should be abolished.

His boss, Toby Ziegler, stopped him and told him a bill to abolish the penny would never be called for a vote, because… “Where’s the Speaker of the House from?” “He’s from Illinois, which, by the way, is the only state where you can put pennies in a toll machine,” Seaborn said, as he began to realize why the bill would never be called for a vote, “It’s ’cause Lincoln’s from Illinois! And… so is the Speaker.”

Illinois’ clout may have been a reason that bills to abolish the penny — going back decades — never went anywhere. But Illinois’ Dennis Hastert went from Speaker of the House of Representatives to prison.

And the current occupant of the White House, President Donald Trump, did not wait for congressional approval to end the penny. He just directed his Secretary of the Treasury to stop minting pennies.

History

The first pennies were larger than the ones we know today and have since been dubbed the “Large Cents.” They were nearly the size of the current half-dollar and made completely of copper. Early pennies portrayed a woman with her hair flowing to symbolize liberty (pictured below.) Lady Liberty was on the penny for more than 60 years — although in different designs, including one where her hair is braided. These were produced from 1793 to 1857.

According to Bullion Exchanges in New York City, “Depending on their condition and variety, Large Cent coins can be worth on average between $20 and $5,000. However, several Large Cents have been valued at over $50,000, though they are in credibly rare.” In 1856, the penny got smaller and was made up of 88% copper and 12% nickel. This penny got a redesign, featuring a flying eagle, but production issues led to it only being made for two years (pictured below).

It was replaced in 1859 with the Indian Head Cent. This coin featured the image of Liberty wearing a Native American headdress (pictured below.) The Professional Coin Grading Service says “from 1859–1864, the cents were made of a mixture of copper-nickel. In 1864, partly in response to the privately issued Civil War tokens, the weight of the Indian cent was reduced, and the metal composition reverted to bronze, a nearly pure copper alloy.” The Indian Head Penny is one of the most popular finds for collectors.

It wasn’t until 1909 that Abraham Lincoln was depicted on the coin, in honor of his 100th birthday — making him the first U.S. President to be repre sented on a coin. Lincoln cents made from 1909 to 1958 are known as Wheat Pennies, since the reverse side featured two wheat stalks to symbolize prosperity and agriculture (pictured below.) It was made mostly from copper, except for 1943. During World War II, pennies were made of zinc-coated steel since copper was needed for ammunition and military equipment.

In 1982, the Mint shifted to a zinc core with a thin copper coating to help cut costs. From 1959 to 2008, the reverse side was an image of the Lincoln Memorial to commemorate Lincoln’s 150th birthday. In 2009, the Mint issued four different pennies in celebration of Lincoln’s 200th birthday and the 100th anniversary of the Lincoln cent. The reverse side highlighted his birth and early childhood in Kentucky, his formative years in Indiana, his professional life in Illinois and his Presidency in Washington D.C. The current penny features Abraham Lincoln on one side and the union shield on the other side which according to the U.S. Mint, represents Lincoln’s “preservation of the U.S. as a single country.” This design was first issued in 2010.

Discontinuation

Why stop producing the penny? It comes down to simple math. That one cent coin costs the government nearly four cents to make. Think about it — it costs nearly four times its actual value! This is because of the rising price of raw materials, minting, and shipping. This has caused production costs to grow from 1.42 cents to 3.69 cents per penny over the last decade. Based on the most recent estimates, the Mint expects to save approximately $56 million annually by discontinuing production of the penny.

Another factor is consumer behavior. The penny isn’t worth a whole lot these days and most people are making purchases with a credit or debit card. A Capital One Shopping report found that only 11 percent of in-store transactions are made with cash.

Interestingly, talk of nixing the penny has been around for decades. U.S. Representative Jim Kolbe (R-AZ) introduced the Price Rounding Act of 1989 which would have done away with the penny and required rounding to the nearest five cents. In 2017, U.S. Senator John McCain (R-AZ) proposed the Currency Optimization, Innovation and National Savings (COINS) Act, suspending production of the penny for 10 years with a study to follow.

This isn’t the first time the government has stopped producing coins. The half-cent piece was discontin ued in 1857, and the two-cent piece was only around until 1873. Other coins that stopped production in the late 1800’s include the three-cent nickel and the 20-cent piece.

There have been a few arguments for keeping the penny. Some say that low-income households are more likely to pay with cash so rounding up to accommodate the change will affect them more, and others point to successful charity drives. In 2009 the Leukemia and Lymphoma Society announced that school children had collected over 15 billion pennies in support of its charitable work, raising $150 million dollars for blood cancer research and treatment.

Ramifications

It is important to note that while production has ceased, the penny remains legal tender. The Ameri can Bankers Association says there are an estimated 250 billion pennies still in circulation and retailers can continue to price goods and services in one cent increments.

You may have seen some stores with signs indica ting they are having a penny shortage. With billions sense. It’s more that people just aren’t using pennies as much. Old National Bank Director of Financial Empowerment Ben Joergens says retailers will eventually have to round to the nearest nickel to address that or even offer incentives for customers to bring in their pennies.

“I think large retailers are better equipped to adapt… but small businesses may face some operational challenges with shortages of coins. Over time I think prices will probably be rounded to that five-cent increment.”

Some stores are asking cash-paying customers to have exact change, having already stopped using pennies altogether

A November survey by the Retail Industry Lead ers Association (RILA) found that many of the nation’s largest retailers reported widespread penny shortages.

“Of the 25 companies surveyed, nearly one-quarter indicated that more than 1,000 of their store locations are currently without pennies,” said the RILA in a blog post.

The U.S. Treasury Department has issued some advice to businesses and the public, encouraging people to keep using pennies they may have to give retailers time to adapt. As pennies eventually fall out of circulation, the Treasury says merchants will need to either round up or down to the nearest nickel. Debit and credit card transactions can still be processed to the nearest cent.

“Businesses should apply rounding practices in a fair, consistent, and transparent manner.” — U.S. Treasury

Treasury officials also say “most states require sales tax to be calculated on the final sale price rounded to the nearest penny. How states and localities will ultimately amend their sales tax laws is the right and responsibility of those jurisdictions.”

Treasury officials also say “most states require sales tax to be calculated on the final sale price rounded to the nearest penny. How states and localities will ultimately amend their sales tax laws is the right and responsibility of those jurisdictions.”

There is a problem though. In a September 30, 2025, letter to Congressional leaders, groups like the National Grocers Association and National Retail Federation asked for legislation creating a national law allowing businesses to round transactions to the nearest nickel, saying “at least 10 states and localities have cash laws that would prohibit this practice.”

Legislation dubbed the “Common Cents Act” was introduced in both the U.S. House and Senate in April 2025, ending penny production (which President Trump later ordered on his own), and proposing rounding cash transactions to the nearest five cents, but has yet to reach a floor vote.

Will all of this rounding end up costing consumers? The Treasury says no, “For cash transactions, final transaction prices will be rounded down just as often as they will be rounded up, so there should be no overall effect on consumer prices.”

Joergens agrees, “I think in the end the effect will be net neutral.”

Maybe not for retailers, though. The American Restaurant Association estimates that universally rounding down could cost their members $13 to $14 million a month. The RILA expressed the same sentiment in its November survey: “Two-thirds of respondents said they are rounding transactions to the benefit of consumers when pennies are unavailable — a practice that, while fair to shoppers, is costing businesses millions of dollars as small amounts add up across thousands of daily cash transactions.”

Illinois Retail Merchants Association (IRMA) President Rob Karr penned an editorial echoing the same concerns, saying:

“The crux of the problem is rounding. As pennies exit circulation, it is becoming increasingly difficult for retailers to make exact change for cash transactions. With out pennies, cash transactions will have to either be rounded up to the nearest 5 cents or down to the nearest 5 cents. Because federal and state officials have not provided guidance on the issue, businesses are left to set their own rounding policies. Meanwhile, as more consumers choose to pay electronically rather than with cash to avoid the hassle of rounding, they’ll also be on the hook for more payment process ing fees. That’s because each time a card is swiped or tapped, retailers are charged fees by card processing companies. In 2023 alone, these companies collected more than $172 billion in payment processing fees, most of which is passed on to consumers in the form of higher prices.”

Some businesses may stop accepting pennies altogether, and the Federal Reserve Board says there is no statute mandating that businesses must accept coins or cash. They are free to develop their own policies unless there is a state law that says otherwise.

What about in Illinois?

With no federal or state guidance yet, various bodies have started addressing the issue.

• Previous General Assemblies have seen bills requiring businesses in Illinois to accept cash payments for purchases of less than $2000 and banning businesses from being cashless. None have passed.
• This past October, the Illinois Gaming Board (IGB) issued a memorandum in response to inquiries about how to issue cash winnings if pennies are involved. The Board said all IGB licensees who operate cash businesses — including all casinos, video gaming licensees and retail sports books — are required by law to pay out all moneys owed to patrons.”
• The IGB said this could be done in a number of ways if the business is short on one cent coins including rounding up to the nearest nickel or dime, using an alternate payment method in accordance with Illinois law, or offering gaming activity that doesn’t use one cent increments.
• The Illinois Department of Revenue (IDOR) has posted signs at its locations where cash is accepted regarding its rounding policies (pictured above, right.)
• Some local governments like Wood River, IL have stopped accepting pennies for city payments and are now rounding to the nearest nickel for payments like utility bills.
• In the Facebook group “What’s Happening in Rockford, IL” a member posted a sign that a local McDonald’s had put up to explain the store’s rounding policy (pictured above. left).

Canada

Canada is way ahead of us when it comes to the penny. Minting stopped in 2012 and the penny was officially withdrawn from circulation in 2013. This was done for the same reasons as here in the U.S. — production cost and a purchasing power that amounts to zilch. It was estimated that eliminating the penny would save about $11 million in taxpayer money per year. To help with the transition, the Canadian government issued rounding rules:

In the fall of 2012, the Royal Canadian Mint asked businesses to return pennies through their financial institutions for melting and recycling of the metal content. In a research paper published in 2018, a student at the University of British Columbia looked at how elimination of the penny affected grocery shopping. She found that ultimately, rounding wasn’t costing consumers much extra, but that grocery retailers were benefiting to the tune of about $157 per year.

Other countries that have done away with their one cent coin include Australia (1992), the Netherlands (2004) and Switzerland (2006). New Zealand removed its one-cent and two-cent coins from circulation in 1989 and ditched its five-cent coin in 2006.

Is the nickel next?

The nickel could very well be next on the chopping block. It costs nearly 14 cents to produce each five-cent piece. According to Money Digest, the nickel is made up of 75% copper and 25% nickel, both of which have grown in cost. There has been talk about changing the mix of metals, but even a slight alteration in weight could throw off things like vending machines that accept nickels.

Now the dime, that’s another story. The 10-cent coin is a downright bargain, costing five to six 10 cents to make and quarters are around 15 cents per coin.

Other changes ahead?

In August, the U.S. Department of Treasury announced that the federal government would stop issuing paper checks for most federal payments. This includes Social Security checks. Recipients now must either sign up for direct deposit or receive their benefits through a debit-type card. This hasn’t been a huge change for most, as the SSA says less than one percent of recipients had been getting paper checks.

What about the State of Illinois? The Illinois Office of Comptroller (IOC) sends out about 15 million payments, or “warrants” each year to state employees, retirees, providers and vendors. 80% of those payments are through electronic fund transfer (EFT).

State retirees and employees are the highest users of EFT, while vendors are the least likely to opt for direct deposit. The IOC makes continued efforts to encourage the use of EFT such as inserts in mailed paper checks, social media posts, and flyers included with annual W-2 mailings.

Having paychecks and payments directly deposited saves time and is more secure. There is no fear of checks getting delayed or lost in the mail by U.S.P.S.

The IOC knows that not everyone has a bank account, so the office has the Bank On program which provides unbanked Illinoisans access to affordable and safe accounts with banks and credit unions around the state.

Moving forward

The discontinuation of penny production really is an end of an era. For many of us, pennies were the first coins we were introduced to as kids, filling our piggy banks or starting a coin collection.

Pennies will always be a part of our history — and our vernacular. “Dollar pinchers” just doesn’t have the same ring to it, and there isn’t likely a market for a song called “debit cards from heaven.”

Expert and amateur coin collectors (known formally as numismatists) will continue to look for rare gems like the 1943-D Copper Lincoln Penny (pictured below) and the 1909-S VDB Lincoln Cent.

How businesses and the public will adjust as pennies drop in circulation remains to be seen, and Joergens says there will likely need to be an education component to the shift. Other currencies like the nickel will be evaluated. Countries like Sweden are leading the way towards a cashless society. There, most stores and restaurants don’t accept cash and even street vendors take digital payment.

For now, in Illinois and the U.S., the penny is still in play. So pick up that penny on the street for good luck… just don’t expect it to buy you much.

The Penny was originally published in Fiscal Focus on Medium, where people are continuing the conversation by highlighting and responding to this story.

School funding in Illinois is always a hot topic. Most parents probably think their child’s school should be receiving more money. Some districts get more than others, and local taxpayers are often asked to help pick up the slack.

There have been changes in recent years to make funding more equitable around the state, so that the schools struggling the most receive a larger chunk of state money. Recently, leadership at the Illinois Federation of Teachers (IFT) and the Illinois Education Association (IEA) penned a joint letter raising concerns about the Evidenced Based Formula (EBF) that was put into place in 2017. They said …

“Since adopting the [EBF], Illinois has only provided the statutory minimum of about $350 million annually, leaving a funding gap of $2.3 billion. Amid record inflation and shrinking government grants, this funding is increasingly insufficient.”

When considering this complex issue, it’s important to review the history of this massive change in how the state funds schools and take a look at how it’s working so far.

2017 SCHOOL FUNDING REFORMS

In 2017 the Illinois General Assembly passed, and Governor Bruce Rauner signed into law historic legislation to overhaul the way schools are funded by the state. Prior to the passage of PA100 –0465 (Manar/Davis), Illinois had the most regressive school funding formula in the nation. A report by the Education Trust in 2015 found that for every dollar Illinois spent on non-low-income students, the state spent only $0.81 on low-income students(1). This disinvestment in Illinois’ most at-risk youth showed across income levels and racial lines. For example, the achievement gap between white students and black students in fourth grade reading proficiency, a key indicator of future success and earning potential, was 31% in 2017(2).

HOW DID THESE INEQUITIES GET SO BAD?

Under the new law, Illinois went from a one-size-fits-all General State Aid (GSA) funding model for schools to the Evidence Based Funding (EBF) model that focuses on the individual student needs of a school district. Under the previous formula, a district’s funding was based heavily on student attendance and was cobbled together through a combination of state and local dollars to provide a baseline per pupil amount. This per pupil figure was called the Foundation Level, and by the last year of GSA (Fiscal Year 2017), that level had not been raised in seven years, despite recommendations from the Education Funding Advisory Board to raise the amount from $6,119 per student to $9,423 per student(3). In fact, in its 2017 report to the General Assembly, the Education Funding Advisory Board (EFAB) noted that the Foundation Level set in statute had fallen short of their recommendations since the first recommendation was adopted in FY 2002. To make matters worse, years of proration, a policy that cut school funding by the same percentage for each district, had deepened the funding disparities among school districts(4).

In their January 2015 report to the General Assembly, EFAB implored members of the General Assembly to end the practice of proration, which in FY 2015 resulted in districts receiving only 89% of dollars owed to them.

At the risk of having our initial recommendation ignored, EFAB is compelled to note that if underfunding is to continue, then the policy of prorations should be ended… Imagine a year in which the state appropriates funding sufficient to cover only 90% of the GSA claim and how that would affect two districts — one heavily reliant upon state resources, which constitute 60% of its budget, and another less reliant upon the state and receiving only 10% of its total budget from the state. Each district may lose 10% of its GSA claim. But the district dependent upon the state loses 6% of its total budget. The wealthier district’s 10% cut in GSA results in only a 1% cut in its total budget. So, a seemingly fair method of dealing with a funding shortfall ultimately has a more devastating effect on our school districts that are least capable of absorbing funding losses(5).

NEW FORMULA FUNDING GOALS

After years of advocacy and negotiations on the part of education reform groups, former State Senator Andy Manar and State Representative Will Davis, the new Evidence Based Funding (EBF) formula was signed into law with a statutorily established 90% funding goal by 2027. The law also included a non-binding agreement to appropriate an additional $300 million to be distributed using the new formula, and an additional $50 million a year to fund a property tax relief grant. In FY 2025, after seven years of the General Assembly making good on its funding commitment (except for FY 2021, when the state was in the early chaos of COVID-19), the amount still required to get all districts to 90% adequacy stands at $2.33 billion(6). To meet this funding target by FY 2027, the state would need to increase funding by $1.1 billion each of the next two years, which just isn’t feasible. Short of a miracle influx of state revenues, or relief of other state funding pressures, it is clear that Illinois is not going to meet its goal of 90% school funding by 2027. As the state gets closer to this deadline, questions are being raised about what sort of financial progress Illinois has made in school funding, and what impact EBF has had.

HOW DOES EBF WORK?

EBF recognizes the unique characteristics of students that make up a school district and calculates how much funding a school district needs based on their student population. The model includes 34 cost factors that take into account the demographics, regional wage differences, and research-based interventions and investments needed in each district. Based on these cost factors, the Illinois State Board of Education (ISBE) calculates each district’s Adequacy Target which represents what full funding for each district means. The model then calculates a district’s local capacity target to determine how much a district can contribute toward their own Adequacy Target. The formula then looks at what the district received from the state in the previous year to determine the district’s current adequacy funding. Districts are placed into four tiers based on their level of adequacy and new money is then distributed to the least well-funded districts starting with (and most heavily to) Tier 1 and 2 districts. Fifty percent of new dollars are distributed to Tier 1 school districts, 49% goes to Tier 2 districts, 0.09 % goes to Tier 3 and 0.01% goes to Tier 4.

As mentioned above, statute requires that the state increase funding to by a minimum of $350 million each year — with $300 million to go through the EBF formula, and $50 million to go to the Tax Relief Grant Fund(7). The state has met that obligation each year the formula has been in place, except for FY 2021, when state resources were limited due to COVID-19 and lawmakers held school funding flat. The law imposes a deadline of getting each district to 90% adequacy by 2027. This would represent full funding for a district, because in general, the remaining 10% comes from federal money.

SHIFTING TIERS

Importantly, every year, ISBE recalculates the “cutoff” points delineating the various tiers. As the state does a better job funding districts overall (by making good on its promise to appropriate at least $300 million through EBF each year), the cutoff for being a Tier 1 school increases. In FY 2018, districts funded at 65% adequacy or lower were considered Tier 1. In FY 2025 that number increased to 78%, representing significant state progress. The graph above further illustrates how district tier counts have changed since EBF was enacted(8).

In FY 2018, $366.6 million was available for EBF new tier funding, while in FY 2025, $350 million was available for tier funding, with $50 million being distributed through a Property Tax Relief Grant. However, these numbers are a little misleading as total FY 2025 appropriations for K-12 funding, which includes new tier funding of $8.629 billion are much higher than total K-12 funding appropriations for FY 2018, which was $6.676 billion. This resulted in a $1.953 billion increase in funding for K-12 districts in FY 2025 compared to FY 2018.

Additionally, in the 2018 school year there were approximately 1.2 million students in districts funded at or below 70% adequacy. That number has decreased to approximately 177,000 for the 2024 school year. The number of students in districts with at least 90% funding adequacy has increased by nearly half a million in the same time period. The percentage of low-income students in districts with 70% or lower adequacy was 79% in the 2018 school year. That number decreased to 8% for the 2024 school year(9).

PUTTING THE MONEY TO GOOD USE

According to the 2024 Evidence-Based Funding Spending Report from the Illinois State Board of Education, Tier 1 districts have used the increased funding to reduce class sizes as a top strategy to improve student growth. School districts have also been hiring more core teachers, improving curriculum and learning tools, and expanding pupil support services.

SUCCESS STORIES

In a November 7, 2024, article in the Belleville News Democrat, Belleville Township High School District Superintendent Brian Mentzer said, “The model has probably been the single most significant financial event of my 27-year career for schools.”

The article noted that the district has been able to drive down its class sizes by hiring more staff and expand its extracurricular offerings. The increased state support also “relieves the stress placed on other pieces of the puzzle,” like the local tax levy, Mentzer said.

Four years ago, the group Stand for Children Illinois put together several videos about what EBF has meant for some schools.

Teachers and parents in the Zion Elementary School District said the new funding formula had helped schools offer more dual language programs, provide school supplies to needy students and not rely so heavily on local property taxes.

An elementary school in West Chicago said EBF increased dollars for teacher hiring, reading programs and student transportation.

Monmouth-Roseville High School has been able to hire more qualified teachers and offer programs to meet the needs of both rural and English as a Second Language students.

The Carmi-White Jr./Sr. High School at one point had to cut important programs like fine arts, vocational and athletics. Now, the district has more funding and is not in such a dire financial situation. The programs have been rebuilt.

And Vienna High School now offers a Certified Nursing Assistant program so students can begin a career right after graduation. Special needs students have more resources in the classroom.

TRENDS IN ACHIEVEMENT

The move to the new funding formula was motivated by the need to not only close the funding gap between students of color and their white counterparts and the gap between low-income students and non-low-income students, but to close the achievement gap as well. Studies show that money matters to student outcomes, and in some cases additional funding matters more for some students than for others. Reduced class size raises achievement, teacher quality and subsequent increased teacher wages raises achievement, and targeted interventions raise achievement. What is more, the effect of these factors is “more pronounced for students of color and those in schools serving concentrations of students in poverty”(10).

The data shows that the EBF model distributes funds to Illinois school districts in a highly equitable way. From FY 2018 to FY 2023, nearly 60% of new funding through EBF has gone to low-income students and the overall gap to adequacy for school districts has been reduced by $1.53 billion(11). This has helped the poorest of districts address long-standing needs. While the new formula has provided significant resources to the districts most in need, whether there has been a corresponding reduction in the achievement gap is a complicated question. Two years into the new formula, the COVID-19 pandemic shuttered schools across the world. States, including Illinois, are still recovering from learning loss. According to a report by the Illinois Workforce and Education Collaborative, the Discovery Partners Institute, and the University of Illinois, Illinois has had a strong recovery compared to other states but is not back to pre-pandemic levels of achievement.

The study showed that students of color, students eligible for free and reduced priced lunches, and students who experienced more remote learning during the 2021 school year saw the sharpest declines in achievement. The study also shows that for those same demographic groups there was a steep increase in absenteeism, which can lead to more challenges with learning and development(12).

However, these demographic groups have seen the fastest recovery, possibly because of the significant progress Illinois has made in directing more resources to those groups. Unfortunately, according to the 2024 Education Recovery Scorecard (a collaboration between the Center for Education Policy Research at Harvard University and the Educational Opportunity Project at Stanford University), these demographic groups have not yet caught up in math, resulting in widened income and racial gaps compared to pre-pandemic levels.

“Statewide, relative to white students, math achievement gaps for Black and Hispanic students grew by .18 and .26 grade equivalents since 2019.” The picture is a little rosier in reading where Illinois is one of only three states where achievement has surpassed 2019 levels(13).

Now, more than ever, having a funding formula that is targeted to those students most in need is critical to learning recovery. It is a story that is thematic about the pandemic; low-income and minority groups have been hit the hardest. Fortunately, Illinois is on the right track by directing most of the $2.1 billion investment in EBF to low-income and minority students.

According to the Center for Tax and Budget Accountability, an additional $2.3 billion is needed to meet the statutory 90% funding goal by 2027, and with current funding progress, Illinois is on track to meet that goal at best by 2034.

The question remains that if the state stays on that track, and the 90% funding benchmark is delayed by several years, what, if any, effect will that have on Illinois school districts? And given the pressing needs of other components of the state budget, can more money be found to shorten up that timeframe? Many advocates are pushing for the state to appropriate at least $550 million new dollars to EBF each year to keep pace with inflation and make up for the lost FY 2021 year of funding.

CHICAGO PUBLIC SCHOOLS SAY THEY ARE OWED MORE

Chicago Mayor Brandon Johnson has told the media that the state owes CPS $1.1 billion in school funding dollars. According to the State Board of Education (via Capitol Fax), this is the amount that CPS would have received in FY 24 if the state had immediately funded schools at 100% adequacy levels. However, as previously discussed, state law established a 90% adequacy funding target with the remaining 10% coming from federal resources by 2027, so it’s a bit like comparing apples and oranges. The mayor seemed to be accounting for state dollars that would outpace statutory goals. Again, fully funding EBF would also require substantial new revenues.

When it comes to school districts, Chicago is an anomaly. Since Chicago Public Schools (CPS) has its own pension system, putting in its own contributions (the state covers employer pensions costs for all other districts), state law dictates that CPS’ local capacity target portion of the EBF be reduced by an amount equal to the CPS pension contribution. The state helps pay some pension costs for Chicago schools, but the bulk is covered by CPS.

According to the Civic Federation, to reach the statutorily required $1 billion FY 2025 CPS pension contribution, the state will contribute $353.9 million while CPS will be responsible for paying the remaining $661.6 million. The required yearly pension contribution amount is annually subtracted from the district’s local capacity target. That lowers CPS’ funding adequacy, which affects tier placement and ultimately how much state funding the district receives. In other words, subtracting this amount makes CPS eligible for more tier funding under EBF. Chicago is the only district that receives this treatment statewide, because it is the only district that has its own pension fund.

Chicago Public Schools was originally classified as a Tier 1 district but has since been reclassified as a Tier 2 district. The graph below shows how statewide EBF allocations have increased at a higher rate than EBF allocations to CPS. However, the percentage of statewide EBF contributions allocated to CPS has only decreased from 24% to 21% during this time. It is also worth noting that CPS becoming a Tier 2 district means they receive less tier funding on a year-to-year basis.

Another factor impacting CPS funding was the discovery of a coding error in FY 22. The coding error resulted in overstated payments to Chicago Public Schools of $6,726,771 in Fiscal Year 2019, $17,910,724 in Fiscal Year 2020, $17,910,724 in Fiscal Year 2021, and $44,964,721 in Fiscal Year 2022 for a cumulative total of $87,512,940. CPS entered into a payment plan with the state to pay back the overstated payments (the above graphs reflect these changes). During the fiscal years 2022 and 2023, Chicago saw a significant increase in their local Corporate Personal Property Replacement Tax (CPPRT) revenue, increasing by $304.5 million in FY 2022 and another $73.3 million in FY 2023. While this increase in local revenue benefited CPS during FY 2022 and FY 2023, the CPPRT data used to calculate local capacity in EBF lags by two years.

These increases in CPPRT impacted CPS’ local capacity calculation for FY 2024 and FY 2025, lowering the amount paid to the district by the state. The district’s CPPRT revenue dipped back down in FY 2024 and FY 2025, which will have an impact on their state funding for the next two fiscal years.

1 Source: The Education Trust, Funding Gaps 2015.

2 Source: Nation’s Report Card, NAEP Data Explorer 2017. 3 Source: Illinois Education Funding Advisory Board, Illinois Education Funding Recommendations, January 2017.

3 Source: Illinois Education Funding Advisory Board, Illinois Education Funding Recommendations, January 2017.

4 For several years, the General Assembly appropriated less than ISBE needed to assure each district received its full share of the agreed-upon foundation level of $6,119/pupil. With no guidelines, ISBE prorated funding, providing every district an equal percent of what they were owed (which ranged from 95% down to 89% over time). Those district more heavily reliant on state funding as a percentage of their overall revenue were, not surprisingly, much more significantly, and negatively, impacted than better-off districts who received relatively modest amounts of state funding.

5 Source: Illinois Education Funding Advisory Board, Illinois Education Funding Recommendations, January 2015.

6 Source: Center for Tax and Budget Accountability (2024, May), Fully Funding the Evidence-Based Formula: FY 2025 Proposed General Fund Budget.

7 If the General Assembly appropriates less than the full $300M to EBF required in the statute, the law calls for new dollars to be distributed even more heavily in favor of Tier 1 and Tier 2 districts.

8 According to ISBE funding distribution calculation data in FY 2018, there were 313 districts classified as Tier 1, 346 classified as Tier 2, 48 classified as Tier 3 and 146 classified as Tier 4 (certain types of districts were not initially assigned tiers). Improvements were seen over time. In FY 25, 369 districts were classified as Tier 1, 219 were classified as Tier 2, 93 were classified as Tier 3 and 247 were classified as Tier 4. The increase in Tier 1 schools is due to the rising levels of adequacy.

9 Source: Advance Illinois Equity Dashboard.

10 Source: Baker, B. (2017) How Money Matters for Schools.

11 Source: Center for Tax and Budget Accountability (2023, March). Educating Illinois: A Look at the Evidence-Based Funding Formula.

12 Source: Torres, M., Cashdollar, S., Bates, M. (2024, July). Descriptive Trends in Student Renewal Outcomes in Illinois: Test Scores, Enrollment and Attendance.

13 Source: Education Recovery Scorecard, 2024. Center for Education Policy Research at Harvard University.

EVIDENCE-BASED FUNDING was originally published in Fiscal Focus on Medium, where people are continuing the conversation by highlighting and responding to this story.