The number of financially troubled schools in Illinois increased 30 percent last year, leaving nearly one out of every six school districts facing money woes, state education officials said Wednesday.
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And, they warned, the situation could get worse.
The State Board of Education’s annual Financial Watch List, released Wednesday afternoon, cited 145 of the 932 school districts that operated during the 1992-93 school year as being on shaky financial footing.
The state’s top school official, Robert Leininger, said the ballooning number of troubled schools should be a warning to politicians that the way the state funds education should be changed drastically.
“Last year, I predicted this list was going to continue to grow,” said Leininger, who is retiring from his post soon. “Until we get a reliable, predictable source of income, we’ll continue to Band-Aid the problem.”
Coming less than a month before the March 15 primary election, the list likely will add fuel to a heated education funding debate in the campaign for governor.
Democratic candidates battling for the right to challenge Gov. Jim Edgar pointed to the news Wednesday as evidence of what they consider to be his mishandling of the schools’ funding troubles. And they took the opportunity to reiterate their plans for improving the situation.
The watch list is not a collection of schools on the financial brink, but it shows those that are having cash-flow problems. The list is significant because it is a barometer of the general health of schools statewide.
Like many critics of the current system of funding the state’s schools, Leininger said income taxes should be increased and property taxes cut to bolster revenue and make the system fairer.
Last year, 111 of 946 districts were on the list, or not quite one in nine. The largest number of districts on the annual watch list was 198 in 1988. That was the first year the state issued a list.
This year’s list of 145 school districts held several surprises, including Hawthorn School District 73 in booming Vernon Hills in Lake County. One of the other districts on the list, Highwood-Highland Park School District 111, has merged with two neighboring school systems.
Chicago Public Schools are not on the list because they operate under a separate financial oversight system, the Chicago School Finance Authority.
The list is the state’s method of identifying districts that could experience more severe financial problems.
Gary Ey, the state board’s assistant superintendent for school finance, said there is “a good chance” that next year’s list could be even longer.
A district is placed on the list if its year-end balance from four major funds-education, operations and maintenance, transportation, and working cash-is 5 percent or less than the total revenue collected in those funds during the year.
In Cook County, 8 of the 10 districts on this year’s list are additions, and most were in the south suburbs.
That upward trend is mirrored in counties statewide, although the reasons vary.
In Downstate counties, decline in local property values and inadequate state assistance are major contributors to the school funding problems. In the collar counties, officials in many districts said the 1991 tax-cap law has made it impossible for them to keep up with rising costs. The law limits the size of tax increases the districts can get without voter approval.
Some school administrators said Wednesday that any income-tax increase would have to be coupled with property-tax relief to be successful.
The list also helped highlight the ongoing financial troubles facing school districts in other suburban areas.
Joe Kaczanowski, the Cook County schools’ assistant superintendent for program development, said many south suburban schools are having problems because they do not have sizable property tax bases.
Kaczanowski and other regional school officials said that the closings of industry and business, as well as lower home property values, limit the amount of income available to some south suburban districts.
“In Cook County, you have the richest and the poorest districts in the state,” Kaczanowski said. “It’s just economics.”
But politics may decide whether the gap is narrowed. And while the issue will be debated vigorously in this year’s statewide elections, legislative leaders said it is unlikely major changes will be made until after the election.
Reacting to the new watch list, Edgar spokesman Mike Lawrence defended the governor’s record on education and cited his fight to make the income-tax surcharge for schools permanent as evidence that he “has made education funding a priority.”
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“He is sympathetic to what the outgoing superintendent is saying,” Lawrence said. “The governor wants to keep education funding a priority, but additional state funding is not the answer for all these districts.”
Lawrence also said the governor was “not surprised” by results of a recent Tribune poll that indicated most Illinois voters would accept an increase in state income taxes to fund education, as long as property taxes were lowered.
State Comptroller Dawn Clark Netsch has made more education money a cornerstone of her campaign for the Democratic gubernatorial nomination. Last month, she proposed a plan to raise income taxes by $2.5 billion, diverting $1 billion to public schools and the rest to property-tax relief and income-tax exemptions.
She said Wednesday that she was “surprised and saddened” by the increase in the number of schools on the watch list.
“It’s really bad news. But it shows that it’s not just Chicago that has a school funding problem,” she said. “And it proves that the state has to change the way it funds the education system.”
Atty. Gen. Roland Burris, another Democratic gubernatorial candidate, said the watch list “is going to grow until you get a governor in this state who is committed to funding education.”
Burris repeated his plans to provide $250 million in new education funding each year. With that money, he said, “We’re going to take the pressure off those districts” with financial difficulties.
Richard Phelan, president of the Cook County Board and another candidate for governor in the Democratic primary, said that only after education reform should the state consider raising personal income taxes.
“The answer to the problem is not to just increase the income tax 42 percent and throw money at the schools and say everything is done,” Phelan said. “I think schools are underfunded, but this isn’t a single problem.”