Why school districts are spending bus taxes elsewhere

One of the smallest school districts in DuPage County bused just 429 students last year, but the cost to taxpayers to bus those students was one of the highest.

That's because much of the money Queen Bee Elementary District 16 levied for busing is being diverted for other purposes. And other suburban school districts are doing the same.

District 16 took in $5,307 for every student it bused last year, but it spent just $1,390 per student for transportation, according to a Daily Herald analysis of 90 suburban school district audits. Then, Queen Bee transferred $2 million of its nearly $2.3 million in transportation funds to pay for other operations that already are taxing as high as they can without a referendum.

"All of that extra revenue is being transferred to the education and (operations) funds because we have reached our tax cap limits," said Mike Cushion, Queen Bee's assistant superintendent for business and finance. "Without the transfer we'd be operating in massive debt, so the only mechanism is to levy in transportation."

It's a growing phenomenon. Cushion said it's due to the decline of property values within the district and a loss of property tax revenue.

Nine other school districts combined to transfer more than $13 million from their transportation budgets to other funds last year, including $7 million in Algonquin-based Community Unit District 300.

Wheeling Elementary District 21 did something similar this year when its education fund revenues were hampered by a massive decrease in the district's property values, forcing the school board to draw down reserves by more than $11 million to cover costs. The education fund mainly pays for teacher salaries at the district.

State law not only caps the amount of money school districts can collect each year, but it also caps the growth of tax rates in certain funds, like the education fund and operations and maintenance fund, but not transportation.

"This is one of the avenues districts have to take in order to maximize revenues," said Bill Johnston, assistant superintendent of business at Round Lake Unit District 116. "If we didn't take the opportunity, we'd be losing levying authority."

District 116 officials transferred more than $1.8 million out of the transportation fund to cover shortfalls in the education fund after property values declined in the district by nearly $20 million last year. Because of the restrictions on the education fund tax rate, revenues there declined by nearly $2 million between 2013 and 2014. Overall, the district's property tax revenue barely changed from the prior year.

Most of the school districts are taking in more money for transportation than district officials are earmarking for those costs. Last year, the 90 districts took in more than $320 million for transportation funding combined, but they spent just $301 million to bus students to and from school as well as transport them to extracurricular events throughout the year.

The school districts averaged $1,034 in tax revenue to bus students but spent an average of $972 per student on transportation, according to an analysis of school district audits and Illinois State Board of Education transportation data.

Some are socking it away in reserves, but others like Queen Bee are transferring it to other funds to cover shortfalls elsewhere.

"We're handcuffed," Cushion said. "We can't operate a district with no money and all this uncertainty coming out of Springfield. I'm actually surprised you're not seeing more of this."

That's because some school districts also charge parents of bused students an additional fee for transportation services.

While most public schools bus any student who lives more than a mile and a half away from school for free, a few charge all bus riders. Some offer busing services at a premium if the students live closer than a mile and a half. None of the fees make school busing programs self-sustaining, though.

In Mount Prospect Elementary District 57, all bus riders are charged $375 a year if they register before June 1. The district generated $255,707 in 2014 from transportation fees, which amounted to about a third of the district's annual transportation costs.

"We have some parents question the fees when they also pay taxes, but the board of education's philosophy is they want to focus tax dollars into the classrooms and nonmandated services be paid by fees," said Dale Falk, District 57's assistant superintendent for finance and operations.

Addison Elementary District 4 also charges fees to all bus riders, but those represent just 10 percent of the school district's transportation expenses.

State law doesn't require most suburban school districts to offer transportation to and from school, and Maine Township High School District 207, East Aurora Unit District 131 and Winfield Elementary District 34 don't.

Cushion said the Queen Bee board "has not entertained" the idea of a fee for bus riders, but that might change if the state tinkers with school funding formulas and restricts these types of fund transfers in the future.

"There's a rumor they may not allow that going forward," he said. "If that's the case, it will be a death knell for school districts."

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