Members of the District 65 and 202 School Boards were provided updates about potential legislation that, if enacted, could have an adverse impact of multimillions of dollars per year on each District.
Calling it the “triple threat,” Gretchen Livingston, a member of the District 202 Board, said there were bills pending which would shift state funding away from Districts 65 and 202, such as Senate Bill1; there are bills that would freeze property taxes for two years; and there are discussions to shift the cost of funding teacher pensions from the State to school districts.
Add to the list the Illinois State Board of Education’s proposal to cut funding for special education, and District 65 is looking at a total of possible cuts in funding or additional costs of more than $27 million during the next four years. District 202 is looking at a total of more than $13 million in possible cuts or additional costs during that period. The table below gives a breakdown of the potential cuts and additional costs on a year-by-year basis for each District.
Ms. Livingston, who is also a member of the Executive Board of ED-RED (a group that lobbies on behalf of certain school districts in Cook, Lake and DuPage Counties), reported that ED-RED, is in the process of developing what it is calling a “21st Century Student Base GSA Funding Model.” The ED-RED model is still in the works but will address some of the issues that Districts 65 and 202 have been critical about in bills that have surfaced in Springfield, such as Senate Bill 1, she said. Its key objectives are:
• Define adequate school funding in Illinois to support student achievement;
• Develop alternatives for allocating the funds that achieve equitable distribution of resources; and
• Create a robust economic model for adequacy and equity that can easily be modified to test alternative approaches of allocation and be data driven.
In developing its model, Ms. Livingston said ED-RED was using data from National Louis University that has been tested in other states and tweaked a little bit. She added legislation that would adversely impact Districts 65 and 202 was “still looming,” but added, “There’s not much happening in Springfield.”
To make matters worse, William Stafford, chief financial officer of District 202, said, “The State situation is going to get worse.” He gave an example that Districts 65 and 202 measured the impact of the potential pension shift by assuming that the impact would be 0.5% of teacher salaries in year one and that it would increase by that amount for four years. He said Moody’s credit rating agency was at ETHS a month ago and required ETHS to run scenarios under which the pension shift would be 1% a year for five years and 2% a year for five years. Under those scenarios the impact of the pension shift could be up to “fivefold” higher than what is estimated in the table.
“We do as much as possible to use collaboration with the Districts to save money where we can,” said Mr. Stafford. The Boards were provided a list of 15 areas where the two Districts currently work together, including cost-saving measures in food service, shared services and joint purchasing. Wellness and technology sharing efforts are the targets of future collaborations.
District 202 Board member Anne Sills asked about shared purchasing for “essential items like paper goods and supplies.” Mr. Stafford said that the Districts’ “great relationship with the City” allows the schools to “piggyback” on things like buying bulk salt to de-ice sidewalks, roads and parking lots. Dr. Eric Witherspoon said that “state buying” helps the Districts to “get access to volume pricing.” Dr. Goren added that shared services, such as using the same attorneys, help the Districts to obtain discounts and help align a legal strategy.
District 65 Board member Candace Chow brought up the “virtual consolidation, shared service model,” saying that the Districts had “talked about” it before and that perhaps it was time to “look more aggressively” at the idea. Ms. Chow suggested that the Boards consider having “someone external come in” to consult “on where we might go, where can we get efficiency gains. … As stewards of the community’s money, we owe that to our taxpayers.” Several Board members agreed with Ms. Chow’s comments.
“I get where that’s going, but let’s be very, very clear,” said Mr. Stafford. “Finance is no different than other areas. We have a philosophy and strategies. We have fiduciary responsibilities. The Districts have had to develop fiduciary policies over the years. We have very different policies and very different strategies. We need to have a philosophical discussion before we go into that.” He emphasized that the Districts have been working together to reduce costs.