Report Charts the Future of Illinois Education Funding

Executive Summary

The federal Elementary and Secondary School Emergency Relief (ESSER) program delivered $200 billion nationally between 2020-2025, including $7.8 billion for Illinois, to stabilize school operations during COVID-19, address learning loss, expand digital access, support student mental health, reduce class sizes, and sustain critical staffing. The expiration of this funding marks a pivotal turning point in K–12 education finance. Districts serving low-income students relied heavily on ESSER to launch and scale tutoring programs, extended learning opportunities, counseling services, and literacy initiatives that helped narrow post-pandemic achievement gaps. These districts now face mounting fiscal pressures that threaten to reverse hard-won gains. This Policy Brief examines ESSER’s sunset impact on the 2025–2026 school year and identifies state policy options to sustain its most effective interventions.

What did Illinois districts spend ESSER funding on, and what progress was made?

ESSER funds in Illinois have primarily been directed toward five focal areas (Illinois State Board of Education, 2025):

•     Expanding tutoring and intervention programs to address learning loss
•     Investing in technology and broadband access for remote learning
•     Enhancing mental health and social-emotional support services
•     Hiring additional staff and reducing class sizes
•     Implementing COVID-19 safety protocols in school buildings       

While comprehensive impact evaluation continues, available data show positive relationships between ESSER investment and student outcomes. Illinois districts allocating approximately 45% of ESSER funds to staffing maintained higher math and reading achievement on IAR and SAT assessments during the pandemic, while districts investing only 3% in staffing experienced larger achievement declines and slower recovery (Cashdollar et al., 2024).

Chicago Public Schools exemplifies these patterns. Serving 17% of Illinois students (90% students of color, 71% low-income), CPS experienced larger pandemic-related achievement declines than the state average but demonstrated faster recovery rates in both IAR reading and math (Barragan Torres et al., 2024).

What are the implications?

With ESSER funding expired and Illinois facing budget challenges, districts that expanded tutoring, hired counselors and social workers, and reduced class sizes with federal dollars are now scaling back (ISBE, 2024). In turn, many districts expect larger class sizes, with many anticipating hiring delays or position losses (Smylie, 2025). Education stakeholders are watching how these changes affect student outcomes, especially for populations that benefited most from expanded services (FutureEd, 2024).

Recommended Actions

This policy brief outlines three strategic pathways to sustain students’ progress:

Pathway 1: Rethinking the evidence-based funding model and property tax distribution formula to provide sustainable, equitable baseline support. Currently, nearly 60% of Illinois K–12 funding comes from local property taxes (vs. 45% national average). While the state’s Evidence-Based Funding (EBF) formula was designed to address disparities, it has not fully closed funding gaps (Smylie, 2024). Revising this formula would thus rebalance revenue streams, preventing districts with lower property values from being disproportionately affected by lost federal funds. Potential actions include reassessing adequacy targets, accelerating tier funding, and adjusting property tax caps for stable, predictable funding.

Pathway 2: Developing a state-level ESSER successor to maintain proven interventions. Rather than letting successful recovery initiatives vanish, Illinois could create a dedicated recovery fund sustaining high-dosage tutoring, summer learning, counseling services, extended learning time, mental health staff, and early literacy programs that demonstrated measurable gains. Competitive or formula-based grants would maintain infrastructure for interventions with proven impact.

Pathway 3: Exploring targeted grants for districts with the highest concentrations of vulnerable students. Prioritize districts serving high percentages of low-income students, English learners, and students with disabilities. Funds would maintain staffing for special education, multilingual education, wraparound services, advanced coursework, and extracurricular opportunities—supports that typically face first cuts. This approach triages resources to prevent the most severe service disruptions.

What’s Next?

Illinois policymakers face a pivotal choice: allow ESSER’s expiration to widen opportunity gaps or implement proactive, equity-centered strategies that preserve academic recovery and protect underserved learners. Each policy option presents trade-offs. Formula acceleration provides sustainable support but requires significant state investment during fiscal constraints. A dedicated recovery fund targets specific programs but may not address systemic funding needs. Transition grants offer immediate assistance but provide temporary rather than structural solutions.