Budget errors put DuPage County school district in a bind

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Located in a leafy and affluent stretch of suburban DuPage County, Center Cass School District 66 in Downers Grove seems at first glance to exemplify public education at its best.

The district boasts three neat and modern school buildings, enthusiastic teachers with a reputation for academic rigor, and plenty of personalized attention for its 1,100 students in kindergarten through eighth grade.

But the district’s dire financial woes have resulted in deep budget cuts this fall, including reducing the number of teachers and building custodians, eliminating all after-school and athletic programs, cutting bus routes and cutting the school day.

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

Now, weeks away from the November 8 midterm elections, District 66 teachers, administrators, parents and school board members are urging voters to support a property tax increase after years of scrutiny. of low taxes and problematic budgeting practices that have thrown the district into crisis.

The financial collapse hitting District 66 has been years in the making, officials said, and can be attributed to the district’s relatively low tax rate and equalized assessed value, or EAV, which is the value assigned to a property by the Township Assessor’s Office.

Local revenue is calculated using the local tax rate multiplied by the EAV of the community within the boundaries of the school district. 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.

Additionally, with very little industry in the area, 90% of the district’s property tax revenue comes from residential property owners, and only 10% of its budget comes 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 of the reasons the district’s financial difficulties were not revealed earlier is the way taxes are collected in the district. DuPage County.

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

District 66 was including those tax dollars in its year-end report for the fiscal year ending June 30, an accounting practice that makes the district’s fund balances appear healthier than they are. And instead of rolling over the funds to the new fiscal year, the district was using those revenues to pay for current year expenses, a practice that began in 2014, District 66 officials said.

The practice had for years painted an inaccurate picture of the district’s health, failed to recognize mounting deficits and depleted reserve funds, said District 66 board member Chris Esposito.

Although the advance use of tax dollars is not illegal, “it is a practice that causes all kinds of problems, like the ones we are seeing here,” Esposito said.

The school district hired new auditors, cut $2 million from its budget in the last two years and issued advance tax guarantees to cover payroll, “which is a fancy way of saying payday loans,” Esposito said.

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

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

But he found its financial picture worrying: additional revenue was needed to operate, facilities were deteriorating, technology infrastructure was failing, the district’s financial profile with ISBE had fallen, and the district had no reserves for three to six months.

“What has happened is that the cost of educating students now includes funds for security and technology. … A lot has changed in the last 30 years, and the district’s increased revenue has not been offset by the increased costs of educating a child,” Wise said.

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

Voters rejected an earlier request this summer to raise the district’s property tax rate. This fall, voters are being asked to increase the rate from $2.14 per $100 of a property’s equalized appraised value to $2.55.

If passed, it would mean a 19% increase in the property tax rate at the Center Cass district line on homeowners’ property tax bill, down from the 24% increase the district had sought with a referendum in June.

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

If the referendum fails in November, officials said, the district will face deeper cuts for the 2023-24 school year, including potentially cutting eight additional teaching staff members, closing school libraries, eliminating curricula that they are not state mandated. such as art, music, band, and foreign languages, and increased disruption to bus routes.

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

“When you look at the state of Illinois, we are probably the worst in the nation in terms of too many school districts and too few schools in each district,” said Eric Gustafson, Councilman for District 6 in Darien.

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

“The money should be spent on the 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.

But Wise said consolidating school districts “would drive the district tax rate higher than is proposed by the referendum.” The tax rate in neighboring Woodridge School District 68 is $4.34 per $100 of equalized assessed valuation, nearly double that of District 66, Wise said.

Consolidation would also cause the district to lose local control over its decision-making, he said.

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

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

Some supporters of District 66’s tax rate increase referendum have raised concerns that the state could “take over” the district, as it did with North Chicago School District 187 in 2012. That district just receive the green light from ISBE to go from being a state appointed board to a locally elected school board.

But District 66 appears to be a long way from that destination, as a district’s financial profile score is different 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. The state appoints a financial oversight panel only if it determines the district hasn’t followed through on its plan, according to Matthews.

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Elizabeth Uribe, a volunteer with the Save Center Cass School District 66 community group and a District 66 parent of a kindergarten and second grader, said passing the referendum in November is critical to preserving the district’s reputation as a destination school system.

Despite deep budget cuts this fall, the community is coming together to support students, including hosting a Friday afternoon community 5K run for members of the canceled cross country team. this fall due to budget cuts.

“I think it was a really tough decision, with the district cutting back on extracurricular activities, but it has energized the community,” Uribe said.

“Children are missing out on services, and the only thing left to cut is to hurt our children,” he said.

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