Chicago Urban League, ISBE Reach Tentative Settlement in Yearslong Suit

Days after Chicago Public Schools filed a lawsuit against Gov. Bruce Rauner and the state claiming discriminatory school funding, the Illinois State Board of Education announced it has reached a tentative settlement in a similar case after a yearslong legal battle with the Chicago Urban League.

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Document: Read the tentative agreementDocument: Read the tentative agreement In the agreement, ISBE agrees to revise the way it handles general state aid cuts and says it will cover the Urban League’s $12,000 litigation costs. But the plaintiffs' complaint against the state has been dismissed with prejudice.

An ISBE spokeswoman said the board will consider and vote on the tentative agreement at its meeting next Wednesday, but will not comment on the matter until after that vote.

An Urban League spokeswoman also declined comment Friday afternoon, but Lisa Scruggs – a private attorney assisting the plaintiffs on their case – acknowledged the two sides had reached a tentative settlement.

"The Board will consider and vote on the tentative settlement agreement during the February 22 regular meeting," she wrote in an emailed statement. "The Plaintiffs are unable to comment on this matter until after the vote."

In its 2008 suit, the Urban League claimed the state’s funding model has a “demonstrable, disparate and adverse impact” on minority students, violating the Illinois Civil Rights Act. The suit also claims the way schools are funded violates the state constitution’s Equal Protection Clause with respect to African American and Hispanic students.

The Urban League has since moved for a partial summary judgment on a single issue in the case – proration. Specifically, the plaintiffs have asked a judge to rule whether or not the district’s practice of splitting district funding equally, regardless of its size or student population, discriminates against students based on race.

“So when they cut that state funding equally among all the schools, for those lower income schools it was a much bigger percentage of their overall funding sources than it was for rich schools that get a lot more of their money from property tax wealth,” said Joshua Cauhorn, an associate attorney with Burke, Warren, MacKay & Serritella, and author of “The Search for the Magic Formula: History of Illinois School Funding Reform.”

In the agreement, ISBE agrees not to use proration unless it has “sufficient appropriation” – meaning 95 percent or more of submitted general state aid claims are funded. If that number falls below 95 percent – defined as "insufficient appropriation" – the board will either cap per pupil cuts or use another methodology to distribute GSA “based on the needs of each school district and its students.”

In the event of insufficient appropriation, ISBE would determine its methodology following a series of public hearings.

Cauhorn said part of the reason the case has taken as long as it has is due to the complexity of the state’s education funding formula, which he compared to an airplane made from the spare parts of other airplanes.

“It’s leaky, it’s inefficient and it doesn’t account for student need,” he said.

CPS filed its own suit Tuesday, claiming the state violated Chicago students’ civil rights, implementing two education systems: one for Chicago’s predominantly black and Hispanic students, and another for white children outside the city.

CPS CEO Forrest Claypool was asked about the Urban League’s suit earlier this week, but said that case is “unrelated” to the district’s legal action.

“Our case is much simpler and much more straightforward,” he said Tuesday. “It’s frankly something that’s developed since 2012 and it’s gotten worse every single year. Now it’s at the breaking point where if nothing is done it will continue to get worse.”

In its complaint, the district says it receives about 15 percent of the state’s education funding despite the fact that it carries 20 percent of the state’s students. District spokeswoman Emily Bittner said the state's funding formula has shortchanged CPS $500 million this fiscal year alone, adding the district plans to "aggressively pursue" its lawsuit.

"The Urban League raised critical and complex issues, challenging the State's regressive methods of funding public education and its impact on the poor. We applaud the Urban League for its efforts," Bittner said in a statement.

"Neither the Urban League case nor its settlement affects the lawsuit filed by CPS on Tuesday. The CPS case challenges Illinois' discriminatory funding, which creates two separate and massively unequal systems of funding public education: one system for the predominantly white school districts in the rest of Illinois, and a separate system for CPS, whose African American, Hispanic, and other children of color make up 90 percent of Chicago students."

The state has acknowledged its education funding formula is broken, and convened a 25-member commission to look at possible reforms to that system last summer. That commission issued a list of recommendations earlier this month. But it remains to be seen when any substantive changes will actually be made.

“Everyone in the state is realizing that there is a big problem with the way Illinois funds its schools and that it hurts kids who need that schooling the most,” Cauhorn said. “It’s immoral, it’s wrong and I’m excited to see what all this pressure will result in and hope that legislators are listening.”

Brandis Friedman contributed to this report.

Follow Matt Masterson on Twitter: @byMattMasterson

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