U-46 files to be Cook County school district

Elgin Area School District U-46 officials Thursday formally asked the state board of education to be reclassified as a Cook County district.

The move, which would help the district seize millions in lost general state aid payments each year, came just days after State Sen. Michael Noland detailed new legislation that would provide a funding fix.

"Legislation would provide a solution, but we do not believe a change in the law is required," Superintendent Jose Torres told the board. "In our eyes, the best solution is to have U-46 designated a Cook County district."

The district would even move its administrative offices to Cook if need be, he said.

The 41,000-student district has schools in Kane, DuPage and Cook counties.

For years, the majority of the district's taxable property was in Kane County. But several years ago, Cook County became dominant. Yet the district is still considered a Kane County district by the state, which officials believe results in inaccurate amounts of state aid.

The more local tax revenue available to a school district, the less state funding it receives.

The "limiting rate" - the maximum property tax rate allowed under the Property Tax Extension Limitation Law - determines the amount of local funding. If it is overestimated, it appears the district will receive more in local property taxes than it actually does, but the state delivers less funding based on the estimate.

In U-46's case, Kane County, as the "home county," estimates DuPage and Cook counties' rates.

"U-46 is in the position it's in is primarily because of consolidation. ... Now we are being penalized," Torres said.

This school year, district officials calculated they should have netted $69.7 million in general state aid. Had the Cook County rate been used, they would have gotten $78 million.

But with Kane County working as the dominant and estimating county, U-46 will get only $58.3 million.

The state gave U-46 a one-time $7.1 million "administrative fix" this year to help with the funding shortfall. Noland's legislation would force the state board to readjust the limiting rate once the actual rate becomes available, and adjust general state aid payments.

Current state law caps the prior-year rate adjustments that go into state aid at $25 million for all districts, with a majority going to Chicago Public Schools.

The state board has been working with U-46 officials on a permanent funding fix over the past few months, senior budget analyst Toni Waggoner said.

"We've been looking at what short-term solutions are there and what long-term solutions are there," she said. Of the approximately 80 multi-county districts in the state, only a small handful are affected by limiting rate estimations. U-46 is because it is considered a "foundation level" district - a poor district in need of the greatest appropriation of state aid, Waggoner said.

No decision has been reached, general counsel Darren Reisberg told the board, because there's no "rule directing us to it. We have eight hundred some districts to answer to."

Reisberg suggested that addressing the issue in two steps might be a logical move - first through a reclassification and then through legislation.

State board members asked to be regularly updated.