The State Says Marengo's Schools Need $8.8 Million More. Here’s How It Got That Number.

Every year Illinois prices out a list of school resources for each of its roughly 850 districts, teachers and counselors and nurses and technology, and adds them into a single dollar figure for what an adequate education there would cost. Then it measures how far short each district falls.

For the two districts that educate the children of Marengo, the answer this year is $8.8 million.

Marengo-Union Elementary Consolidated District 165, which teaches about 1,100 students from preschool through eighth grade, sits at 68 percent of its target, short by $5.4 million. Marengo Community High School District 154 sits at 71 percent, short by $3.4 million. Both are in Tier 1, the state's designation for districts furthest from adequate funding, which this year covers 227 of Illinois' 850 school districts. Only 83 districts in the state are further from adequate than District 165.

Riley Community Consolidated School District 18, whose single school sits on Riley Road, is at 97 percent. Its shortfall is $149,000.

Those are the state's figures. We asked all three districts what the numbers look like from inside, and all three answered. District 165's answer is the one to hold onto while reading the rest: it projects a deficit of close to $1 million this year, after $1.4 million in fiscal 2025 and $1.1 million in 2024, and says that unless revenue changes significantly, reductions will need to begin with its next budget cycle. That is further down, after the formula.

The Three Districts Are Not Side by Side

District 154 is not a neighbor of the other two. It is built on top of them. Its territory is District 165 and Riley 18 combined. Add the two elementary districts' assessed valuation together in each recent year the state publishes, and you get District 154's to the dollar.

So a Riley family is not outside this. They pay the District 154 levy like everyone else, and their eighth grader walks into a high school that is $3.4 million short. Every household in District 154 is inside a Tier 1 district.

What the State Is Actually Measuring

The formula is called Evidence-Based Funding, and Illinois adopted it in 2017, folding general state aid and four separate special education and English learner grants into one.

The state builds each district's Adequacy Target from the ground up, using cost factors the statute says were identified through academic research as necessary to improve student outcomes. A district with more low-income students, English learners or students with disabilities gets a higher target, because educating those students costs more. The salary portions are adjusted for regional wages.

For 2027 the targets are:

The student counts are the formula's own. The two elementary districts, the only like-for-like pair, are $686 apart per student, and all three carry the same regional wage adjustment. District 154 sits higher because the model prices a high school differently. So almost nothing in the gap that follows comes from the state valuing Marengo's students differently.

The Part That Decides Everything

Having priced out what adequacy costs, the state estimates how much of it each district ought to be able to raise itself. That figure is the Local Capacity Target, and it is easy to mistake for something simpler.

It is not a measure of property wealth, and it is not what a district actually collects. In the statute's words it is an amount a district is "assumed to contribute," based partly on assessed valuation. The formula divides a district's assessed value by what educating its students costs, weights that by grade span, ranks the result against every other district in Illinois, and caps the percentage at 90.

Riley 18's 90 percent is that cap. It is not a finding about Riley's tax base, and 115 Illinois districts sit exactly there. The two Marengo shares include an adjustment explained below.

What a district's actual tax rate raises, as the state calculates it, is tracked separately as real receipts, and against the adequacy target the three sort differently:

In tax year 2024, the year the formula used, Riley's property produced about the same share of its target as District 165's, at roughly half the tax rate. We asked Riley why its receipts sit so far below what the formula assumes. Superintendent Jason Grey: "A few years ago, the Riley School Board intentionally under-levied for one year to provide tax relief to local property owners and spend down our fund balances. Now that those reserves have been drawn down, Riley must return to a standard levy this year to sustain daily operations." The 2025 county rates, on a sheet District 165 sent us, run the other way: Riley 18 at 2.66 percent and District 165 at 2.36, which District 165 says is the lowest elementary district rate in McHenry County.

The underlying wealth is real. Riley 18 has about $602,000 of equalized assessed value behind each student, and District 165 about $304,000, roughly half as much, on the report card's tax year 2023 figures. Riley's high capacity share comes from a great deal of property behind very few students, not from what Riley collects. (District 154's figure, about $727,000, is high for an arithmetic reason: it sits on the same ground as the other two combined while teaching about half as many children.)

One more step in the formula cuts against both Marengo districts. When a district's tax rate raises more than the formula assumed, the state adds part of the difference to its capacity, about 40 cents of each extra dollar here, which shrinks its measured gap. District 165 is credited an extra $342,261 that way and District 154 an extra $1,108,585. The adjustment runs one direction only: a district that raises less than assumed is not marked down. So Marengo property owners paying above what the formula assumes are, in the formula's eyes, making their districts look less underfunded.

What Tier 1 Gets You

The tiers are set by where a district lands as a percentage of adequacy. In 2027 the Tier 1 line fell to 72.0 percent, from 75.6 the year before. District 154 sits at 71.3, about two-thirds of a point below it.

The tiers decide who gets new money. Of every new dollar Illinois puts into the formula, 50 percent goes to Tier 1 districts, 49 percent is shared between Tier 1 and Tier 2, and the last 1 percent goes to Tiers 3 and 4. ISBE's own description of the design is that as districts receive tier money over the years, "they should move closer to adequacy."

In 2027 that came to $332,524 for District 165 and $92,911 for District 154, about 6 percent of one shortfall and under 3 percent of the other. And it does not land this year: new tier money folds into a district's base the following year, so the 2027 award works on the 2028 gap.

The Gap Is Not Standing Still

Illinois recalculates every target each year, and the targets have been rising.

Between 2026 and 2027, District 165's target rose by about $1.34 million and its shortfall grew from $4.35 million to $5.41 million. Over the same span, the $294,073 the state had awarded the district a year earlier rolled into its base, lifting its counted resources by about $280,000. The target moved roughly five times faster.

That is not a Marengo story. Across Illinois, adequacy targets rose about 8 percent between those two years, and the dollar gap grew for 82 percent of school districts, including 220 of the 227 in Tier 1.

Riley 18 moved the same way: its percentage of adequacy fell 18.8 points in a year as its target rose more than 17 percent, carrying it from above adequate to below. District 154 is the only one of the three that gained ground, 2.8 points, from the worst position of the three in 2026.

Two years is a short series, and none of that is a forecast.

What the Report Card Shows

Two things on the state report card appear to conflict with all of this.

The report card carries its own funding column, and for all three districts its figures match neither of the two state calculations used here: it shows Riley 18 at 120 percent of adequacy and in Tier 4, where the 2026 calculation has it at 115 percent and Tier 4, and the 2027 calculation at 97 percent and Tier 3.

And District 154's most recent reported spending, about $23,900 per pupil, is higher than its $17,791 target per student. The two count different things. The formula counts a district's resources as its local capacity target, plus corporate personal property replacement tax, plus last year's base funding from the state. Reported spending is actual money out the door, from every source. District 154's superintendent, David Engelbrecht, made the point about per-pupil math in a small school: "heating the building costs the same whether enrollment is 600 or 650, yet the per-pupil calculation changes. This highlights why relying strictly on per-pupil metrics can be misleading."

What the Solvency Score Says

The state's School District Financial Profile scores districts on fund balances, spending against revenue, cash on hand and borrowing room. On the newest one, released in September 2026 from fiscal 2025 reports, all three hold Recognition, the top of four designations, with a score of 3.65. That is a test of solvency, not of teaching, and it is the common result: 698 of 850 districts hold it. What it rules out is fiscal distress. District 165's slipped from a perfect 4.00, and the drop is in the one measure that compares spending with revenue.

What This Means If You Live Here

Almost none of this was decided in Marengo. What an adequate education costs here, what share of it local property is assumed to cover, where the Tier 1 line falls, and how much new money exists are set by state law and state calculation.

The one local lever is the levy, and it is capped. All three districts are under Illinois' property tax caps, which limit how fast a district's total take can grow without asking voters, and the state's own file shows the cap binding in all three cases. District 154's treasurer, Jennifer Kasch, relaying a conversation with the superintendent, wrote: "because we are a tax cap county, there are times we are not able to keep up with inflation, as the amount the School District can increase funding is based on CPI or 5% (whichever is lower)." Damisch put it with a widget: a business whose costs rise can raise its price, and "Public schools don't really get to raise the price of the widget." Her one-line version: "Our expenses respond to the marketplace much faster than our revenues do."

Watch District 154's tier. If it crosses the line, it moves from the group that receives half of all new state money into the group that shares the next 49 percent, with the effect showing up in a later year's award.

What It Looks Like From Inside

What a shortfall of this size looks like in a school building is not in any state file, so we asked all three districts, in writing, in August.

District 165 answered with its budget. Superintendent Lea Damisch was careful first to say what the state's number is not: "the $5.4 million is a number created by the State's formula," and "It isn't the same thing as our annual budget deficit." Then: "For me, the simplest way to see the practical impact of being below adequacy is to look at our budget." The district projects a deficit of close to $1 million this year, she wrote, after $1.4 million in fiscal 2025 and $1.1 million in 2024. "These are really the first three years that we have experienced deficits of this size." Those figures count all of the district's funds together, she told us in October, and the deficits have been "concentrated primarily" in the Education and Operations and Maintenance funds, with a smaller, planned one in Transportation. The state's summary of the operating funds alone puts District 165's fiscal 2025 shortfall at about $773,000.

Reserves built over years of what she called conservative spending have absorbed some of those deficits "without immediately making significant cuts to classrooms, staffing, or programs." Some reserves went down on purpose, on boilers, HVAC, plumbing and roofs. The district has about $15 million in reserves, she wrote in October, but "using them year after year to support ongoing operational expenses is not a sustainable financial strategy." So a parent "may not necessarily see our funding challenges through dramatically larger class sizes or programs disappearing," Damisch wrote, "and that has been intentional."

That will change. "You simply cannot continue to operate with a million-dollar deficit year after year. Unless there is a significant change in revenue, ultimately the way to close that gap is to reduce expenditures. That means some of those decisions will need to begin with our next fiscal budget cycle." Damisch wrote in October that she expects to bring a budget reduction plan to the school board in January, looking at staffing, spending and efficiencies, with reductions "through attrition rather than layoffs whenever possible," alongside a forecast running three to five years out.

Damisch credits Tier 1 status: "Our Tier 1 status has definitely helped us." She also put it in scale: the district has about $19 million in annual revenue, and all of its Evidence-Based Funding together, about $4.18 million, is nearly a quarter of it. "In very simple terms, we are receiving more money, but the cost of providing the education and services our students need is increasing even faster."

District 154 answered in the language of fixed costs. Engelbrecht wrote that the district "must maintain strict fiscal responsibility to offset annual state, local, or federal funding shortfalls." Its major building components "are of similar age and reaching the end of their useful lifespans around the same time," which the board manages by staggering replacements, and its career and technical education programs cost more per student, but the high school "remains committed to offering diverse, hands-on career exploration opportunities." That planning, Engelbrecht wrote, happens independent of the district's Tier 1 classification.

Riley 18 answered about staffing a district of 270 students. The state report card lists no school counselor, nurse or psychologist for Riley. "With an enrollment of 270 students, our district lacks the enrollment to employ full-time counselors, nurses, and psychologists," Grey wrote. "Instead, our staff wear multiple hats to ensure the needs of our students, and we maximize efficiency by employing a part-time nurse (3.5 hours per day) and contracting out school psychologist services on an as-needed basis." The answer does not say how counseling is covered.

Grey also offered one thing to weigh against Riley's standing on the state's measure: "Because Riley consists primarily of farmland and single-family homes with very little commercial real estate, the local tax burden falls almost entirely on our homeowners and agricultural property owners."

School board seats are on the ballot at the consolidated election on April 6, 2027. Candidates have been able to circulate nominating petitions since August 25, and file them between November 16 and 23. Those boards do not control the formula. They do control the levy.