Late state payments mean District 300 will need to borrow to pay bills

Late payments from the state of Illinois will again force Community Unit District 300 to borrow millions of dollars to pay its bills in the coming months.

The state owes District 300 $5 million in categorical payments, said Cheryl Crates, the district’s chief financial officer. That figure is expected to double to $10 million by the end of March.

In order to fill the gap, district administrators Monday presented a plan to borrow $8 million through tax anticipation warrants. Board members are expected to vote on the issue at the March 12 board meeting.

The loan will enable the district to make payroll this spring prior to receiving its portion of property tax revenues at the end of June. Crates said the district will begin borrowing in April and the loan will be repaid in full June 30.

“If we had our state payments, we wouldn’t have to borrow at all,” Crates said. “Of course, if we were to receive another payment from the state before borrowing, then the amount would be less.”

Ordinarily, the state makes four categorical payments to school districts for programs such as special education, transportation and early childhood education. But in recent years, payments from the state have been late or unfulfilled. Crates said indications from the state suggest that school districts may receive one more payment this fiscal year, but that it will not arrive until late June.

Last year, the district issued $18 million in tax anticipation warrants. This year’s amount is less because the district has trimmed $14.2 million from its budget in the last two years, allowing it to build up its cash balance. Additionally, the sate was further behind in payments for the 2010-2011 school year, Crates said.