While the education funding system remains in need of reform, it looks like Illinois schools could be in line for some much-needed short-term financial relief. On Capitol Hill, House and Senate Democrats are piecing together a plan to give school districts a $100 billion jolt over the next two years. The source of the cash would be Barack Obama's impending economic stimulus program.

We checked in with Center for Tax and Budget Accountability policy director Chrissy Mancini yesterday to find out what the money might mean for Illinois. In a nutshell, she says “relief” during what’s bound to be a dire year for schools across the state.

Because homes are losing value (Illinois school districts rely largely on property taxes) and the state’s overall financial outlook is dismal, more pink slips and funding cuts are expected without some form of assistance.

“The state could run out of money in March,” Mancini says. “This could be a way to bridge the gap on money that [districts] won’t receive for the rest of the year.”

To put things in perspective, the $2.1 billion worth of federal education money Illinois received last year only accounted for nine percent of all education spending. So the federal money isn’t going to make any one district’s financial troubles disappear.

We reached out to the Illinois State Board of Education, but officials there aren’t willing to estimate how much of the $100 billion Illinois would receive. Officials in New York estimate that they could stand to gain $6.4 billion over the next two years under such a deal. If the awards are tied to the share of federal funding states receive, Illinois schools could net upwards of $3 billion under the plan.

The proposal calls for doling out the federal stimulus money via block grants, largely to avoid unsustainable rate increases. As a result, districts in low-income communities may benefit most. This is because much of the block grants currently received by Illinois go towards lunch subsidies, special education, and other academic support programs. An additional $15 billion worth of Pell Grants, which also might be included in the proposal, could be an incentive for many of those same students to consider college, which we’ve noted is a growing challenge.

Meanwhile, $20 billion would be earmarked for capital projects. For years, the lack of progress on improvements to education facilities has been a sore spot here in Illinois, since communities haven’t seen a dime of state construction money since 2002. Some have opted to go ahead and build anyway. And in certain cases, that’s meant taking money away from the classroom to cover bond payments.

The stimulus money would give the state’s schools a much needed boost. But the annual state-by-state school report card recently released by Education Week (where Illinois earned a D- in the school funding category) is a reminder that the flawed education funding system is an issue that lawmakers can no longer afford to ignore.