Editorial: No argument with schools' high reserves, but some concern
It's great peace of mind if you can sock away some money for a rainy day.
In general, we think it's prudent for suburban school districts to stockpile extra cash, too. But there are important considerations since the money to build up a school district's bank account comes straight out of property taxpayers' pockets.
As Daily Herald staff writer Jake Griffin wrote Wednesday after surveying financial reports of 93 suburban school districts, 18 have enough money on hand to operate for more than a year -- some close to two years -- even if they had no income. More than two-thirds had reserves equal to or above half a year's operating costs. Eighty-five had at least the amount recommended by the Illinois State Board of Education -- 25 percent of operating expenses.
The total amount held in reserve grew at the end of the 2016 school year compared to the year before.
Some groups object to high reserves on the argument that if the school district doesn't need the money, it should be returned to taxpayers. The counter argument is that reserves insulate taxpayers from the pain of having to deal with a school funding emergency.
Some school districts keep squirreling away cash until they can fund major projects, which is a sound approach but raises a caution flag: school officials need to make every effort to inform taxpayers about any major expense and get buy-in, just as they would do if the school district held a tax-increase referendum for the funding.
It can backfire if they don't. Four board members in Grass Lake Elementary School District 36 were replaced in last week's election after saving up more than 3½ times the amount required for annual operations and spending half the reserves on a school addition that proved unpopular with voters.
Is banking a year's worth or more in operating costs too much? It's hard to make that case in the face of the state's malfeasance.
A lot of talk by lawmakers and Gov. Bruce Rauner, but no action, leaves school administrators fearing property taxes will be frozen, state funding will be rearranged and pension costs will be tossed to individual school districts. If there's no state budget by a deadline that's six weeks away, a new school year could start with uncertain funding.
Suburban property taxes are high. And many school districts levy for the most they can get, instead of what they need.
It's not ideal for the taxpayer, but we can't fault schools for stockpiling money in this uncertain climate, as long as they do so wisely.