School officials dispute governor's take on 'reserve' funds

Some school officials say Gov. Quinn's office is being misleading about the billions the state's school districts have "in reserve," as Quinn tries to gather support for shifting pension costs to the districts.

Quinn's office says that having school districts ease into paying pension costs is "sound policy that connects compensation decisions with the responsibility to pay for them," according to a fact sheet sent with information about Illinois school district finances.

"(Ninety-five percent) of school districts have more than the minimum standards of recommended reserves," the fact sheet said, and 822 of 864 Illinois school districts have more than 60 days of reserves in place.

"School districts currently have cumulative reserves of over $9 billion," the fact sheet said.

Quinn has said his plan won't cause higher property taxes because school districts should have time to plan for and absorb the increased costs. Quinn has also argued that by paying their own pension costs, school districts will decide to "make different compensation decisions in the future."

But officials from local school districts say the numbers released about their reserves aren't necessarily fair or accurate.

Some officials say the numbers released by Quinn's office may be high because of early property tax revenue or because of money intended for specific purposes, like required building improvements.

According to Quinn's office, at the end of the 2010-11 school year:

— Champaign had enough money to get through 200 days of operation.

— Danville had enough to get through almost 183 days.

— Urbana had enough to get through almost 103 days.

As for other area schools, Quinn's data shows that Gifford's community grade school district could get through 451 days; Prairieview-Ogden's, 419 days; Armstrong-Ellis', 411 days; and St. Joseph-Ogden, 400 days.

On the other hand, it shows Tuscola could get through 15 days, Georgetown-Ridge Farm through 50, Bement about 77, Bismarck-Henning about 93 and Mahomet-Seymour about 93.

Carol Baker, Urbana's director of business, said the data doesn't take into account that the school district is holding onto money from Carle Physician Group's property taxes, which are being disputed in court.

"We can't spend it," Baker said, because the school district may have to pay it back on short notice.

Plus, Baker said, money intended for transportation or building improvements can't be spent to pay for pensions.

"It's a huge generalization to say that money is available," Baker said.

St. Joseph-Ogden Superintendent Jim Acklin said his school district's finances are healthy, but not as good as reflected in the data from Quinn's office.

That's because the school district had received, but not spent, insurance money from a fire at the bus barn last June. He said the school district is just now starting to use that money, and will pay some related bills in the 2012-13 school year, as well.

Even excluding that money, he said his school district has enough in reserve to operate for an entire year — but that doesn't stop him from being concerned about cuts in general state aid and for things like transportation, both for his school district and other rural districts.

"You're going to see schools go under," he said, especially those whose property tax base and enrollment are both declining, along with state aid.

"For schools like that, they're taking a triple shot to the mouth," Acklin said, although he said he felt confident that St. Joseph-Ogden could get through it.

He said he asked state legislators that, if school districts start paying pension costs, that they be allow to levy property taxes to cover the costs, especially those in Champaign County that operate with tax caps. He said St. Joseph-Ogden covers enough land in Vermilion County that it's not subject to tax caps.

Acklin said he sees the state's attention to school district reserves as going after money districts accumulated after making "sound financial decisions."

"That just really rubs me the wrong way," Acklin said.

Tuscola Superintendent Michael Smith said the information the state released about his district having 15 days worth of cash on hand at the end of 2011 is accurate.

"That number, we hope will be going up a little bit (this year), but still it won't be anywhere near what it would take to cover those pension costs," Smith said.

For his school district, taking on pension costs will mean either drastic cuts or an increase in property taxes.

"Either way, it's certainly not a good situation for Tuscola," Smith said.

If it costs the school district an extra $80,000 or $100,000, "that's going to be two positions we have to cut," Smith said. "It's as simple as that."

Plus, his school district has been making cuts for the last couple of years, so there are limited options about what can be cut.

But he said, in his own opinion, "I don't think anyone as a taxpayer wants more burden put on them," Smith said.

He's also concerned about a lack of details from the state about what pension costs might look like for school districts.

"I realize there's a lot of issues that have to be addressed. ... I just hope they slow down, take their time (and) do it right."

Danville Superintendent Mark Denman said he believes the state's calculation of his district's days of cash at hand is fairly accurate (the state had 183 days, while he found it to be 178 days) and called the data "just a snapshot in time."

However, district reserves include money to be used to make building improvements required by the state, Denman said, work the school district is trying to do without raising its property tax rate.

The economy in Danville is tough, he said, especially with few new buildings going up.

Plus, the school district is feeling the effects of its property tax base going down in value (it declined 5.9 percent last year) and delays in cuts in other state funding, like transportation and special education.

He said property tax revenue makes up about 37 percent of Danville's revenue, and the rest comes from state and federal aid.

"We're much more dependent upon state aid," Denman said. "Taking on even more pension obligations would be very difficult for us."

If it does happen, Denman said, he hopes it's done gradually.

Eventually, taking on pension costs may mean cuts within the school district, and Denman said increasing property taxes "would probably be the very last thing we'd look at."

"Our community is suffering right now," he said.

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rsp wrote on June 26, 2012 at 10:06 am

I wonder how many days Quinn think's a school district should have on hand since they can't count on the state for the funding they are supposed to provide. This is just another pot of money they think they can grab instead of getting their house in order. Go after the superintendants, then the public employees, then the poor and disabled. Now it's really the children because it will cut their education. 

Sid Saltfork wrote on June 26, 2012 at 12:06 pm

Agreed; but money must be found for pork barrel projects that bring in "campaign donations", and votes.  Tax breaks for corporations threatening to move out of state like Sears must be found.  Two years ago; $31 billion was found for pork barrel projects including a dolphin pool liner, baseball field lights, and ramps for religious buildings.  Once there is no more money to be taken from the children, the elderly, the disabled, the poor, and the employees; a tax increase will happen.  The media will support it due to the dire straits that the state will be in.  The replacement legislators will blame it on the previous legislators; and the circus will go on.

longgone wrote on June 27, 2012 at 12:06 am

So the schools have reserves because theve been trying to stay fiscally solvent......the state is going to screw them?   These jack aces!