Post by title1parent on Nov 21, 2009 9:10:44 GMT -5
www.suburbanchicagonews.com/beaconnews/news/schools/1892412,2_1_AU20_SCHOOLLEVY_S1-091119.article
School districts bracing for cash crisis
November 19, 2009
By PAUL DAILING pdailing@scn1.com
It's going to be a bad year for schools.
Local school districts are reading their levies -- their request for a chunk of local property taxes. The economy has killed two factors that raise districts' piece of the pie -- growth and inflation.
And with Illinois' multibillion-dollar deficit, the state comptroller has been sending schools IOUs instead of the funds owed. So the local tax money has to go even further than usual.
Two districts -- West Aurora and Oswego -- are locked into tax rates by referendum, so they'll see their funds actually go down. The rest are bracing for an increase that will not cover rising costs.
"Most of our expenses are contractural, and most of our contracts have gone up more than 4/10 of 1 percent," East Aurora Assistant Superintendent of Finance Jay Augustine said. "Nobody saw that coming."
Levying is a guessing game based on preliminary home value estimates by the county. The numbers aren't officially crunched until spring, usually April. But districts have to get the levies approved by year's end.
So districts historically ask for way more than they know they'll get. The reasoning is that if you go too low in this guessing game, it's not you who loses -- it's the kids.
"You want to really ask high because you don't want to see a big windfall of construction and not have the students see any of it," Yorkville Business Manager Asif Dada said.
Yorkville last year asked for $61.4 million and got $44.3 million. This year, they're asking for $54.2 million.
The rule is this: Governments get what they got the year before plus inflation, plus the cost of new growth in their district. The first addition is for cost-of-living, the second for new kids in the seats.
With the economic collapse, the inflation rate was a meager 0.1 percent. As that number is determined by the state and applies to all local governments, the only X factor for local schools is new growth.
In East Aurora, growth has been lousy, making for a meager hike. They're expecting to get $26.3 million in tax revenue, up from last year's $25.9 million. They'll be asking for $27.2 million.
Augustine is working on a plan to basically redo the bonds East has, paying off the expensive bonds and getting them covered with cheaper ones. All they need is the permission of the bond-holders.
It's like if a person put savings in a bank account with a better interest rate.
"It may not work, but there are some organizations that have had success at doing that, so we're going to try," Augustine said.
He plans to bring the idea to the School Board next month.
While places like East Aurora are dealing with nearly stagnant new growth, St. Charles is expecting about $30 million of new growth to add to the amount it can levy for, said Chief Financial Officer Brad Cauffman.
If that seems like a lot, remember the district's new growth was at $122 million as recently as 2001.
"That number's been tailing off rather steadily," Cauffman said.
Cauffman expects the district to get $141.5 million, so they're asking for $142.9 million. They got $140.4 million last year.
The levying rules are designed to hamstring districts in boom times. The double-digit housing spikes of the 1980s in DuPage County meant the districts were also getting huge yearly increases.
And it wasn't costing 20 percent more to maintain a park district.
School districts bracing for cash crisis
November 19, 2009
By PAUL DAILING pdailing@scn1.com
It's going to be a bad year for schools.
Local school districts are reading their levies -- their request for a chunk of local property taxes. The economy has killed two factors that raise districts' piece of the pie -- growth and inflation.
And with Illinois' multibillion-dollar deficit, the state comptroller has been sending schools IOUs instead of the funds owed. So the local tax money has to go even further than usual.
Two districts -- West Aurora and Oswego -- are locked into tax rates by referendum, so they'll see their funds actually go down. The rest are bracing for an increase that will not cover rising costs.
"Most of our expenses are contractural, and most of our contracts have gone up more than 4/10 of 1 percent," East Aurora Assistant Superintendent of Finance Jay Augustine said. "Nobody saw that coming."
Levying is a guessing game based on preliminary home value estimates by the county. The numbers aren't officially crunched until spring, usually April. But districts have to get the levies approved by year's end.
So districts historically ask for way more than they know they'll get. The reasoning is that if you go too low in this guessing game, it's not you who loses -- it's the kids.
"You want to really ask high because you don't want to see a big windfall of construction and not have the students see any of it," Yorkville Business Manager Asif Dada said.
Yorkville last year asked for $61.4 million and got $44.3 million. This year, they're asking for $54.2 million.
The rule is this: Governments get what they got the year before plus inflation, plus the cost of new growth in their district. The first addition is for cost-of-living, the second for new kids in the seats.
With the economic collapse, the inflation rate was a meager 0.1 percent. As that number is determined by the state and applies to all local governments, the only X factor for local schools is new growth.
In East Aurora, growth has been lousy, making for a meager hike. They're expecting to get $26.3 million in tax revenue, up from last year's $25.9 million. They'll be asking for $27.2 million.
Augustine is working on a plan to basically redo the bonds East has, paying off the expensive bonds and getting them covered with cheaper ones. All they need is the permission of the bond-holders.
It's like if a person put savings in a bank account with a better interest rate.
"It may not work, but there are some organizations that have had success at doing that, so we're going to try," Augustine said.
He plans to bring the idea to the School Board next month.
While places like East Aurora are dealing with nearly stagnant new growth, St. Charles is expecting about $30 million of new growth to add to the amount it can levy for, said Chief Financial Officer Brad Cauffman.
If that seems like a lot, remember the district's new growth was at $122 million as recently as 2001.
"That number's been tailing off rather steadily," Cauffman said.
Cauffman expects the district to get $141.5 million, so they're asking for $142.9 million. They got $140.4 million last year.
The levying rules are designed to hamstring districts in boom times. The double-digit housing spikes of the 1980s in DuPage County meant the districts were also getting huge yearly increases.
And it wasn't costing 20 percent more to maintain a park district.