Education appropriations per FTE in Illinois continue to be an outlier at 2.05 times the U.S. average and 35.6% above pre-recession levels. The significant increase in appropriations over the last decade is driven entirely by the state’s efforts to address its historically underfunded state retirement pension system.
In 2020, 36.8% of all education appropriations in Illinois went to their state retirement pension system. Of the $1.85 billion in pension payments, 77% was used for unfunded past liabilities, not current employees. This means that even after considering additional funding from local governments, over one quarter (28.6%) of all education appropriations in Illinois are now spent on past pension obligations and are not available for use in 2020. This translates to roughly $4,500 per FTE student, more than the entire per-FTE appropriation in either New Hampshire or Vermont.
A SHEF Issue Brief on Illinois from the 2018 SHEF report provides more detail on the funding situation in Illinois.