Suburban schools say cuts, closings loom without state budget by July 1

Suburban schools officials say they are making plans to spend down reserves, borrow and even close schools if Illinois lawmakers don't pass an education budget in the next 10 days.

The General Assembly meets in special session beginning today in Springfield to try to do what it hasn't done since 2014: Pass a budget.

A stopgap funding bill kept education afloat last year, though the state still owes schools more than $1 billion.

But Senate President John Cullerton, a Chicago Democrat, says he's not going along with partial measures again.

If the July 1 start of the new fiscal year arrives without an agreement, "all the funding stops," said Jeff King, chief operations officer at U-46, the state's second-largest school district with 40,000 students. Cuts like eliminating after-school activity busing and hiring would come first.

"We would be out of money by wintertime. We would use all of our reserves," King said. By the end of February, U-46 would need to borrow to make payroll or else close schools, he said.

Other suburban schools echoed his warning.

"If a budget is not passed and/or funding is not provided to schools, then we could continue operations using fund balances through the end of November," said Bill Johnston, assistant superintendent of business and operations at Round Lake Unit District 116, which has 7,300 students.

U-46 receives $150 million annually in general state aid and categorical payments from the state.

The state owes U-46 roughly $24 million in categorical payments for mandated programs, such as special education, bilingual education, early childhood education and transportation for this school year.

U-46 could weather funding shortfalls by depleting its roughly $217 million in reserves - 50 percent of the district's roughly $430 million in operating expenses. It also could raise the property tax levy, take a line of credit or issue tax anticipation warrants, King said.

"We're capped by what CPI (Consumer Price Index) was last December, which was 2.1 percent," King said about how much the tax levy could increase.

The district might have to get a loan for up to $100 million through tax anticipation warrants or a line of credit, he said.

Despite approving a budget for K-12 education for this year, the state owes public schools $1.1 billion in categorical payments.

School districts that rely heavily on state funding but don't have as much set aside in reserves are feeling the most pain.

A Daily Herald analysis in April showed that while some suburban school districts hold enough reserves to operate for more than a year, others have little savings.

In District 116, state funding accounts for more than 58 percent of the district's revenue. District 116's categorical payments are lagging by $4.2 million, Johnston said.

"This has caused us to dip into fund balance, using approximately 5 percent," Johnston said. The district has roughly $33 million in reserves - 40 percent of its roughly $83 million in operating expenses.

Kaneland Unit District 302's chief expects to cut spending by $1.5 million across the board next school year to bring down a projected $3.1 million deficit. More cuts are anticipated over the next three years to balance the district's roughly $55 million operating budget. The district serves about 4,600 students.

"These are the things that we're doing to be proactive in the event there is no (state) budget," Superintendent Todd Leden said. "Students should not see an impact next year to a great degree in any one area. We are not as reliant on the state as many of the other districts."

District 302 receives roughly $5 million in state funding but is owed roughly $3.5 million in categorical payments for this school year. It has roughly $8 million in reserves.

Even districts with modest shortfalls slowly are bleeding out as the problem continues to compound, says Glenbard High School District 87 Superintendent Dave Larsen.

District 87's roughly $140 million operating budget includes about $7 million from the state. About $2.8 million in categorical payments is overdue for this year. The district has roughly $71 million in reserves and serves 8,400 students.

"We're currently stable, but we can't sustain it," Larsen said. "It will start impacting student programming ... from theater, instrumental bands, orchestra, the many sports programs that we have ... there's just a lot of ways that we are supporting kids."

• Daily Herald staff writer Mick Zawislak contributed to this story.

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