After a half-decade of borrowing money every year simply to make ends meet, Richland School District 88A is steps away from operating in the black.
But the recent financial gains were not enough to keep the tiny Crest Hill school district off the state’s financial watch list. The list, released Thursday, identifies districts that are having trouble paying their yearly bills or may be facing larger financial difficulties.
“Obviously, it’s not a list we wanted to make, but things are looking up and we are on the road to recovery,” said Michael Conver, superintendent and principal of the 280-pupil, one-school Will County district. “We are very optimistic we will not be on next year’s list.”
Conver said school officials are using a recent hike in the district’s tax rate to close the yearly budget gap. Within three years, he said, the district should be operating in the black.
In addition to Richland, eight other districts in the state made the watch list–a 43 percent decline over last year, when 16 were singled out. Of those nine, all but Richland and Carpentersville Community Unit 300 are Downstate.
The state also certified four other districts, including Round Lake School District 116 in Lake County, as being “in financial difficulty,” a more troubling designation. These districts must submit financial plans to the Illinois State Board of Education for approval.
“The financial watch list is not a perfect measure of a local school district’s financial situation; this year’s data is very encouraging,” said state Supt. Glenn McGee. “The state board will continue to help districts assess and improve their finances so that every student gets the best education possible.”
This is the 11th year the state board has issued the watch list, and, since its inception, nearly half of the state’s 898 school districts have been included at least once. Most garnered the unwanted distinction if their year-end balances in the four major operating funds–education, operations and maintenance, transportation, and working cash–exceed the revenues two years in a row. Districts also could make the list if they issued tax-anticipation notes two years in a row.
Such was the case in Richland 88A, where school officials borrowed about $475,000 of their $1.3 million budget last year, Conver said. The year before, school officials borrowed about $300,000.
Like many school officials, those in Richland blame the district’s financial plight–in no large part–on the state tax cap laws. Tax caps prohibit school districts from collecting yearly revenues that are more than 5 percent of the revenue collected the year before without approval by voters in a referendum. If the consumer price index is less than 5 percent, then districts can increase the collection only by that amount.
But the tax cap is not the only financial issue haunting District 88A residents. For nearly 30 years, until the 1997 referendum plan passed, the district had not increased its education tax rate–the portion of the budget that pays teacher salaries and finances school programs, such as art and music.
“Our current position is the result of a lot of years of very low tax rates and not being able to generate the taxes we need to educate the kids,” Conver said.
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And all the borrowing could not help fend off program cuts.