U-46 bill probably won't mean new jobs

Elgin school officials were celebrating Thursday after the General Assembly passed a funding fix that may pour more than $15 million into Elgin Area School District U-46.

But the celebrations were tempered by the stark fiscal realities in the district, which is facing a multiyear deficit and millions in delayed payments from the state.

While the additional state funding secured by the legislation will help mitigate those issues, it appears that U-46 will not be going on a spending or rehiring binge anytime soon.

“This is excellent news for the district, but we still have a $40 million structural deficit,” district spokesman Tony Sanders said. “It will put us in a better financial position long term.”

On Thursday, the state House overrode Gov. Pat Quinn's July veto of a funding fix that is now expected to net an additional $15.5 million for Elgin schools. The issue stems from U-46's location in three counties; Elgin school leaders believe the problem is costing the district millions in lost state aid each year.

The additional infusion of cash, school officials say, will mainly help in budgeting for the 2011-12 school year, a process that will probably start in December.

“It should reduce the impact of what we have to cut next year,” Director of Financial Operations Dale Burnidge said.

In its “Destination 2015” plan, not yet approved by the board, the district has set a goal of eliminating the $40 million deficit by the start of the 2014-15 school year.

The legislation should also help U-46's cash flow issues. The school board this month reviewed a proposal for making up to $30 million in short-term loans to make a $34 million debt payment due Jan. 1, 2011.

The additional $15.5 million should help but not my much, officials said. Because the money will be spread out over some 14 payments for the rest of the school year, U-46 will only see a little over $2 million in added funds by the end of the calendar year.

“A couple million will help, but we still need to get some payment from Cook County by the end of year or get the state to pay us the ($22 million it still owes U-46) by Dec. 31,” Burnidge said.

Although district leaders say the deficit and the lateness in receiving the funds will probably preclude the district from any significant rehiring, teachers union President Kathy Castle encouraged the district to use the funds to mitigate class sizes and multi-grade classrooms, both of which have increased this year due to cuts.

“I would hope that the district would consider relieving some of the issues around classrooms,” Castle said.

The additional funds may also come into play in the spring, when the district's six unions will be negotiating new contracts.

“Anything that Springfield does right now regarding school funding ... that's always a part of what we consider when we sit and have conversations,” Castle said.

But district officials say it is too early to say how the money might be used this year.

“It certainly will ease some financial pressure,” board President Ken Kaczynski said. “It's really too early to put any specifics to that.”

It's even less clear how the new law, which requires the state to use actual Cook County tax rates instead of estimates to determine U-46's share of state funding, will affect the district in the future.

“(U-46 officials have) made a commitment that the Cook County data will benefit them going forward,” said Jason Hall, budget analyst for the state board of education. “We can't say whether that is the case.”