Budget mistakes wreak havoc on the DuPage County school district

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Nestled in a leafy and affluent part of suburban DuPage County, Center Cass School District 66 in Downers Grove appears at first glance to be an example of the best in public education.

The district has three neat and modern school buildings, enthusiastic teachers known for their academic rigor, and plenty of personal attention for its 1,100 students from kindergarten through eighth grade.

But the district’s dire financial problems have pushed this decline into drastic budget cuts, including reducing the number of teachers and building managers, eliminating all after-school programs and athletics, cutting bus routes, and shortening the school day.

“We’re doing educational triage,” said teacher Jake Little, who has taught social studies in District 66 for 18 years. “Student needs are so much greater than they were years ago. … We have some students reading five grades below, and we don’t have the resources for the interventions and attention they need.”

Now, weeks ahead of the Nov. 8 midterm election, District 66 teachers, administrators, parents and school board members are urging voters to support a property tax hike after years of low tax assessments and problematic fiscal practices plunged the district into a crisis.

The financial crisis that hit District 66 has been brewing for years, officials said, and can be attributed to the district’s relatively low tax rate and Equalized Value (EAV), which is the value assigned to a property by the Township Assessor’s Office becomes.

Local revenue is calculated using the local tax rate multiplied by the community EAV within the school district boundaries. Of the 30 K-8 school districts in DuPage County, District 66 ranks in the bottom third for tax rate, EAV and revenue, officials said.

Because there is very little industry in the area, 90% of the district’s property tax revenue comes from homeowners, with only 10% of its budget coming from state and federal funds.

While the district’s finances are audited annually by outside agencies and overseen by the Illinois State Board of Education, one reason the district’s financial woes were not uncovered earlier is the manner in which tax collections are conducted in DuPage County.

Unlike Cook County, where districts receive their property tax receipts at the beginning of the school year when the funds are to be used, districts in DuPage County receive money in late May or early June for the fiscal year beginning July 1.

District 66 included this taxpayer money in its annual report for the fiscal year ended June 30, an accounting practice that makes the district’s cash balances appear healthier than they are. And instead of carrying the funds over to the new fiscal year, the district used those earnings to pay for the current year’s expenses, a practice that began back in 2014, District 66 officials said.

For years, the practice painted an inaccurate picture of the district’s health, failing to acknowledge growing deficits and depleted reserves, said Chris Esposito, District 66 board member.

While using early taxpayers’ money isn’t illegal, “it’s a practice that causes all sorts of problems, as we’re seeing here,” Esposito said.

The school district has hired new auditors, cut its budget by $2 million over the past two years, and issued tax prepayment orders to cover payroll, “which is a fancy way of saying payday loans,” Esposito said.

“It’s not mismanagement of funds. We don’t have the resources,” said Esposito, who urged voters to attend the District 66 school board meeting on Oct. 12 to learn more about what’s at stake in the referendum.

When District 66 Superintendent Andrew Wise took the helm in July 2020, at the height of the COVID-19 pandemic, he was impressed with Center Cass’ “great teachers, community and great kids.”

But he found the financial picture troubling: Additional revenue was required to operate, facilities were deteriorating, technological infrastructure was failing, the district’s financial profile at the ISBE had declined, and the district had no reserves for three to six months.

“What has happened is that the cost of educating students now includes funding for safety and technology. … So much has changed in the last 30 years, and the district’s increased revenue could not offset the increased cost of raising a child,” Wise said.

“It was a perfect storm and if it had been noticed earlier we would have alerted people earlier,” Wise said.

Voters rejected a motion earlier this summer to raise the district’s property tax rate. This fall, voters will be asked to raise the rate from $2.14 per $100 of the settled appraised value of a property to $2.55.

If approved, it would mean a 19 percent increase in the property tax rate to Center Cass District’s position on a homeowner’s property tax bill, compared to a 24 percent increase the district had sought with a referendum in June.

For a $300,000 home, a resident could expect an increase of about $377 a year, or $31 a month, officials said.

If the November referendum fails, officials said, the district will face deeper cuts for the 2023-24 school year, including the possible cuts of eight additional teachers, the closure of school libraries and the elimination of curricula that are not mandated by the state – such as art, music, band and foreign languages ​​– and further closures of bus routes.

Still, some opponents of the district’s referendum proposal say the solution is not to raise local property taxes but to consolidate District 66 into one of the neighboring districts in DuPage County. In addition to Downers Grove, Center Cass District serves 66 students living in Darien, Woodridge and unincorporated DuPage counties.

“If you look at the state of Illinois, we’re probably the worst in the whole country when it comes to too many school districts and not enough schools in each district,” said Eric Gustafson, alderman for Ward 6 in Darien.

Gustafson said taxpayers would benefit from the consolidation by reducing the number of administrators, which he said would drastically reduce the funds required for payroll.

“The money should be spent on children,” Gustafson said, adding that his own three children “received a very good education in the school district.”

“My main question is, ‘Where did all the money go?'” he said.

However, Wise said that consolidation of school districts “would increase the district’s tax rate more than proposed in the referendum.” The tax rate in neighboring Woodridge School District 68 is $4.34 per $100 of balanced assessment — nearly double that in District 66, Wise said.

The consolidation would also result in the district losing local control over its decision-making, he said.

A spokeswoman for the Illinois State Board of Education said District 66’s financial profile of 3.45 out of 4 for 2021 qualifies the district for a financial review, a designation reserved for districts that score between 3.53 and 3.08 . Those with scores from 3.07 to 2.62 are placed on financial alert, while those between 2.61 and 1 are placed on financial surveillance.

“The profiles examine five key indicators of financial health: fund balance-to-income ratio, expense-to-income ratio, days available, percentage of short-term borrowing capacity remaining, and percentage of long-term borrowing capacity remaining,” ISBE spokeswoman Jackie Matthews said in a statement.

Some supporters of the referendum to raise District 66’s tax rate have expressed concerns that the state could “take over” the district, as happened with North Chicago School District 187 in 2012. This district has just received the green light from the ISBE to transition from a state-appointed board back to a locally elected school board.

However, District 66 appears far from that fate, as the assessment of a district’s financial profile differs from the criteria the state uses to trigger a takeover of its finances. If a district meets the criteria, it must first submit a financial plan to the state. According to Matthews, the state only appoints a financial oversight board when it determines that the district has failed to follow its plan.

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Elizabeth Uribe, a volunteer with the Save Center Cass School District 66 community group and mother of one District 66 kindergarten child and one District 66 second grader, said passing the referendum in November was critical to maintaining the district’s reputation as a target school system.

Despite significant budget cuts this fall, the community is rallying to support students, including hosting a Friday afternoon community 5K race for members of the cross-country team whose season was canceled this fall due to budget cuts.

“I think it was a really difficult decision to have the district eliminate after-school activities, but it energized the community,” Uribe said.

“The kids are missing out on services, and the only things left to cut is hurting our kids,” she said.

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