Local schools awaiting millions from state

The state's inability to pay its bills is putting the squeeze on local school districts, threatening vital areas like transportation and special education.

The state is more than 12 weeks late in doling out more than $1 billion to Illinois schools, among the more than $4 billion the state owes local governments and contractors, according to Comptroller Daniel Hynes.

"The state's hurting just like everyone else," said Mary Fergus, spokeswoman for the Illinois State Board of Education. "We vouch for the payments and send them in on time, but there's a backlog."

The delay means many suburban districts have gone months without millions of dollars owed by the state.

Local districts say they have enough cash to cover the shortfall for now, but the delayed payments could become a problem if they are held up any longer - forcing districts to cut costs or consider short-term borrowing.

"It will be a problem if we don't start getting the money come February," said Cheryl Crates, chief financial officer for Community Unit District 300.

A more grave concern is if the state decides it can't meet its obligations and reduces funding for education.

"The ultimate concern is not getting all of that money," said John Burkey, superintendent of Huntley Unit District 158.

Gov. Rod Blagojevich proposed short-term borrowing last month to pay the state's bills, but the General Assembly did not take action on the idea and is not scheduled to meet again until January.

Despite collecting about $5 million in funds over the last 10 days, Elgin Area School District U-46 is still missing about $9.1 million owed by the state, Chief Financial Officer John Prince said this week. Some of the funds, he said, are three months late.

Prince has advised the District U-46 school board to start trimming spending in discretionary areas like energy.

Neighboring District 300 hasn't received millions of dollars it is owed for special education programs, transportation and growth needs.

"They don't have the cash in the bank to mail me the check," Crates said. "They owe us about $6.6 million to date."

The cash shortfall is forcing some school districts - including District 300 - to dip into cash reserves.

Burkey said District 158 can cover its costs for the time being because of its large fund balances.

"We have enough cash on hand that we can pay our bills," he said.