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$2M Deficit, Allstate Property Tax Refund Loom

District 31 school board passes cash-strapped budget as tax appeals weigh heavy on plans.

When it comes to balancing the budget, the options for aren’t pretty. 

In April, voters  by a 2:1 ratio. Meanwhile, the cash-strapped district is fighting a legal battle with , one of the district’s biggest property taxpayers that has appealed its 2004-06 property taxes. If the Northbrook-based company wins its appeal, could lose $2 million or more—on top of an additional $2.3 million has already had to pay for tax appeals between 1992 and 2003.

So at last Thursday’s school board meeting, members had little choice but to vote for a budget with a $2 million deficit—anticipating the property tax refund that may be awarded to  this year.

“For a budget our size, that is a huge issue,” said Director of Business Services Cathy Lauria. 

In the future, could face yet another appeal from for property taxes from 2007-2009. The district has struck a deal with the assessor and the insurance company for 2010-2012 assessment. , however, have ravaged the district’s small budget—and only continue to get bigger.

After the tax referendum failed in April, cut funding for after-school sports programs and other activities and did not replace three staff members who retired--among other cost-cutting measures. .

Despite that $1 million reduction, revenues for 2011-12 still fall more than $2 million short of expenditures. Because the district’s combined fund balance--for example, its cash saved in reserve--is less than three times the amount of the deficit in its four main funds, administrators are required to submit a deficit reduction plan to the state this year. That plan includes the $1 million in cuts made after the referendum failed, as well as $3 million in cash fund bonds to be issued in fiscal 2012.

The district has already issued $3 million in bonds, after .

Although the district has had to make serious cuts, parents have often stepped in to fill the gap. At , donations are helping to make the Homework and P.E. clubs possible this year, while sports programs are going on at this fall due to gifts from the District 31 Education Foundation and the Parent Teacher Council.

The Education Foundation, in fact, went to work shortly after the referendum failed, for the district by July. Much of the money went to upgrade the schools’ computer labs.

Although and the seventh lowest in Illinois, school administrators are still unsure whether or not to put another property tax referendum on the ballot, given how the last one was received. Administrators also don’t yet know whether s 2004-06 property tax refund will affect the district’s budget during this fiscal year or the next one—but regardless, they have to prepare.

“The chances of us settling that case in this fiscal year are getting slimmer, we’ve been told,” said Superintendent Alexandra Nicholson. “We have to plan for it in case it happens.”

For now, the district is looking to cut spending any way it can—and continuing to fight Allstate in court. If the district’s cash reserves fall below 25 percent of its budget, it could go on the state’s watch list and ultimately be subjected to financial oversight from the Illinois Department of Education. 

“Hopefully we won’t get there,” Lauria said. “But we have to get through the storm.”

Deadcatbounce September 29, 2011 at 12:42 PM
Go to the ISAT website for scores. It's broken down by gender and race.
David September 29, 2011 at 06:00 PM
The website has old data. There is no asst principal. Every district in the state is required to paybinto the teachers retirement fund for every teacher and administrator. Im on thr school board. I welcome you to call me or the superintendent any time to get the facts" make your suggestions and better understand why we cannot cut anything else without eliminating teachers and curriculum. We have looked under everybrock and questioned every expense and reduced costs by over $1.5m in last 2 years. We have the 7th lowest tax rate in the state" and that's in comparison with districts in southern illinois with lower costs and larger districts with greater economies of scale. You cant just look at a statband think you have all the answers. Every person that has called and discussed these issues with us has walked away in agreement that we in dire straits and cant find anything else to cut. All extracurriculars were cut this year. French was cut last year. Staff was reduced. Class sizes are up. We have homework club and some sportsbonly because of parent donations. But our goal isnt to race tonthe bottom as you seem to want. We want to improve and update our offerings and curriculum so we can begin to approach those ofnour neighboring districts. Our building inspector says we have $5m of maintenance and repairs to make in next few years. We dont have the money. Without making them, we run out in 5years. Come learn about school finance before you judge.
David September 29, 2011 at 06:28 PM
I can tellnyou because i signed the teachers contract. Call the district or ask a teacher. There was no step up this year. And the steps will be stretched out over 35 years instead of 20 in the future.
Phil September 29, 2011 at 08:00 PM
I have read the prior comments and wanted to provide a perspective that takes basic business and economic sense into account. Strategically companies in the USA are having to reduce their costs to be more competitive, in turn this reduces the capability for USA companies to pay domain related taxes. Villages, counties and states have traditionally looked toward "income" generating practices (think federal / state) and failing that, their constituents to fund "fixed" costs + increases, like local taxes - this cannot continue indefinitely unless your constituents are also "growing revenues". In the last 5-10 years most local US company growth has been stagnant or worse, declining and shrinking. As a result, cost reduction to maintain the ongoing business concerns have become the focal point with all business strategies - including advertising spend and traditionally fix cost reductions. Taxes are going to shrink in tandem with business revenue reductions. If a district/school cannot cover the shrinkage, then they need to look strategically at merging or closing. It's a fact of our future lives. This is not an individual company issue. This is just the start within all districts. You are actually lucky, you have 5 years to figure it out. Most businesses will sink quicker.
Deadcatbounce September 30, 2011 at 01:47 AM
Thanks Phil, I totally agree.   The current educational model is dying.  People like David just don't see it yet.  With the Internet and online learning, the educational system is going to change and for the better.  Places like khan academy and "flip it" are starting to gain a foothold in the education arena.  There are ways to gain efficiencies, but first you need to stop listening to the so called educational "experts" and think outside the box, like Billy Beane did in money ball. He managed a poor team, but got better results with his resources than the wealthy teams by not following the so called experts.  People are tired of these schools always telling the taxpayer how they always need more money beyond the CPI plus new growth, but everyone else has to live within their means

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