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School Funding Litigation

School Funding Litigation

As part of the long quest to reform Illinois’ controversial system for funding public schools BPI asked the Illinois Supreme Court in 2010 to declare that the school funding system under which the state was operating at that time was unconstitutional. We anticipated that the Court would direct the Governor and state legislature to create a new approach, one that would be fair to taxpayers and address the inequalities of the system.

BPI believes that Illinois’ method of funding education is an unfair system of taxation by location. Under state school funding policy some property owners are forced to pay higher school property tax rates than others if they want to reach the state-designated ‘Foundation Level’ — even though the value of their homes is identical. The only difference is where those homes happen to be located on the map. That seemed to BPI to be a stark violation of one of the most sacred tenets of our state constitution: the guarantee of equal protection under the law.

This funding disparity was exemplified by the two plaintiffs in the lawsuit. Plaintiff Paul Carr, a resident of Chicago Heights, had a high school property tax rate nearly two and a half times higher than the school tax rate on a property of equal value in the wealthy Chicago suburb of Winnetka. In poverty-stricken downstate Cairo, Ron Newell’s school tax rate was more than double the amount assessed on a property of equal value in the Scales Mound school district near Rockford.

In this legal challenge to the Illinois school funding system, BPI asserted that Illinois’ inequitable school funding formula violates the Equal Protection Clause of the state constitution by discriminating against taxpayers in property-poor school districts. The BPI lawsuit (Carr v. Koch) made its way to the Illinois Supreme Court in late 2012.  While the state’s top court dismissed our case for lack of standing, BPI’s challenge shined an important light on the failed and unfair nature of the Illinois’ school funding system—a problem that is now clear will not be solved until the State Legislature acts.

Today over three-fifths of total public school funding in Illinois is financed by local property taxes. The State of Illinois finances less than thirty percent, one of the lowest levels in the nation.

Recipient of the MacArthur Award for Creative and Effective Institutions

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