The District 65 School Board placed a $14.5 million operating referendum on the ballot for the April 4 election. If the referendum is approved, the District will be permitted to increase its property tax levy by approximately $14.5 million per year.
The School Board decided to put the referendum on the ballot after several years of extensive and careful consideration. We think the plan represents a thoughtful way to address the District’s financial position. We support it for three distinct reasons.
First, the District is projecting operating deficits which grow from $5.1 million in FY’18 (the fiscal year ending June 30, 2018) to $24.4 million in FY’25. If approved, the referendum will enable the District to maintain its current services and programs, while adding some enhancements to assist striving students. Absent the referendum, the District will be forced to make drastic cuts of $8.8 million in the next two years, and to make another $12.2 million in cuts between FY’22 and FY’25. The impact of cuts of this magnitude would be devastating.
Second, the referendum will provide a total of about $15.2 million for capital projects over the next few years. The District’s architect recently recommended in a life/safety survey that the District make roofing and masonry repairs on its 16 school buildings totaling $24.4 million, as well as other building and site work totaling about $14 million. The referendum will enable the District to do some of that work on a prioritized basis.
Third, while the referendum is structured to sustain the District for the next eight years, the funding would enable the District to survive if the State makes significant cuts in State funding to the District or freezes property taxes, both of which are serious threats.
We recognize the referendum is asking the community for a lot. But we think it is essential for our children, our schools, and our community. We strongly support it.
In this editorial, we summarize in a little more detail why we support it.
Some Background
The District has a structural deficit, where salaries and benefits, which account for 84% of the District’s expenses, are going up at a faster pace than property tax revenues, which account for 75% of the District’s revenues.
There are two key reasons for this. First, the District’s ability to raise property taxes is subject to tax caps, which limit the District’s ability to raise property taxes to the lesser of the increase in the Consumer Price Index (CPI) or 5%. In the last eight years since the Great Recession, the CPI has averaged 1.5%, which historically is very low.
Second, the District’s cost for salaries and expenses has gone up at a faster pace than 1.5%. Salaries have gone up to hire more teachers to address the needs of an influx of about 1,500 students in the District in the last 10 years, and to pay salary increases negotiated with the teachers’ union and other employee unions.
The Board has attempted to manage its budget and look for solutions before asking the community to approve a tax increase. In 2011 the District appointed a committee composed of residents with financial expertise to provide input. As part of the strategic planning process in 2014-15, the District did so again. The Board’s Finance Committee has had many discussions on the issue.
To manage its budget, the District has made cuts totaling about $11 million during the last seven years. In recent contract negotiations with the teachers’ union, teachers made concessions on salary increases in light of the District’s financial position. At this point, options are limited. There is no silver bullet.
Basics on the Referendum
The District is currently projecting that its operating deficits will grow from $5.1 million in FY’18 to $24.4 million in FY’25. The cumulative deficits during the eight-year period are $112.3 million.
If approved, the referendum would provide an additional $14.5 million in funding in year one. In subsequent years, it would provide an additional $14.5 million per year, plus increases on that amount permitted under tax caps. Over the next eight years, the referendum is projected to generate an additional $135.6 million.
The $135.6 million would be enough to cover the projected deficits of $112.3 million, and enable the District to maintain its current educational programs and provide a source of funding for technology for the next eight years. As contemplated the funding would generate a surplus in the earlier years that would be set aside and used to cover larger deficits in the later years.
The balance of the $135.6 million, or $23.3 million, could be used to a) enhance educational opportunities, b) enable the District to move forward with some limited capital projects, and c) maintain the District’s working cash fund balance.
Maintaining the Current Program
In February 2015, the School Board adopted a five-year strategic plan, after obtaining extensive input from parents, teachers, administrators, and the community at large. The plan contains many strategies to improve high-quality teaching and learning, to develop a thriving workforce, to provide a safe and supportive school climate, to enhance family and community engagement, and to maintain financial sustainability. The plan sets high expectations for all students, and contains goals to prepare students for college readiness and to decrease achievement gaps.
In September 2016, the School Board formally adopted an Equity Statement that contains 10 commitments to provide equitable outcomes.
If the referendum is approved, the District would be able to continue with the implementation of its strategic plan, maintain relatively small average class sizes, strengthen the rigor and quality of instruction for all students, provide intensive supports for striving students, provide social and emotional learning and improve school climate, expand family supports and community partnerships, and continue ongoing work to promote equitable outcomes for all students, said Superintendent Paul Goren.
In addition, the referendum would provide a secure source of funding for technology in the amount of $1.9 million a year, which would essentially enable the District to maintain current levels of teacher and student computers, software licenses, and infrastructure.
The referendum would also enable the District to make some enhancements, including hiring additional reading specialists and expanding the “digital promise” program implemented three years ago at Chute Middle School and King Arts School to the other middle schools. Under that program, each middle school student will be provided a computer tablet, and also provided Internet access at home. At the Dec. 19 Board meeting, a panel of teachers and administrators said this program helped them significantly in differentiating instruction and has helped to generate student interest in learning.
Impact If the Referendum Fails
Conversely, if the referendum does not pass, the District will need to make drastic cuts totaling $8.8 million to balance the operating budgets in the next two school years, followed by even steeper cuts in subsequent years. These cuts would have a devastating impact on the schools and on our children.
Superintendent Paul Goren said to achieve cuts of between $4.25 million and $6 million, the District would need to cut between 50 and 60 staff positions, significantly increase class sizes (in some instance, up to about 30 students per class), make deep cuts to central office services and operations, reduce classroom supports, and reduce curriculum and enrichment programming.
To achieve the rest of the cuts needed to reach the $8.8 million mark, the District would need to take some additional steps that could include closing one or more schools, combining buildings to serve fewer grade levels, creating multi-grade classrooms, and reassigning students to different schools, said Dr. Goren.
The $8.8 million in cuts would just get the District past the next two years. Without a referendum, it would then have to make another $12.2 million in cuts between FY’22 and FY’25.
It is difficult to imagine what our schools would look like if cuts of this magnitude became necessary. What is clear, though, is the cuts would have a devastating impact on our children, our schools, and our community.
Providing Funding for Capital Expenditures
An additional benefit of the Referendum is that it will provide about $15.2 million for capital projects over the next eight years.
For the past 10 years the District has been funding its capital projects through its Debt Service Extension Base (DSEB). Much of that work was to provide new or expanded classroom and cafeteria space for an influx of about 1,500 K-8 students. In addition, the District has made extensive roof and masonry repairs, replaced the boilers in the schools, installed double-vestibules in most schools to provide safe entrances, and improved technology infrastructure.
At this point, the District’s ability to fund capital projects through its DSEB is extremely limited. The District’s financial advisers estimate the District could issue bonds totaling about $5.6 million during the next eight years to pay for capital projects under its DSEB.
On Jan. 17, the District’s architectural firm presented a 10-year Life Safety Survey that identifies work that is either required or recommended for the District’s 16 school buildings. The total estimated cost of the work identified is $38.3 million.
Virtually all of the work is in the “recommended” vs. the “required” category. The big-ticket items are $24.4 million for roofing and masonry work; about $7 million to replace classroom ventilation units that are used to heat, and in a few cases cool, classrooms; and $2.3 million to repair parking lots and uneven surfaces used for playfields.
The work is essential to maintain the buildings and sites and to provide an environment for children to learn. Almost all of this work has been on the District’s radar for several years.
In addition to the work identified in the life/safety survey, the District’s master summary identifies a total of $66.9 million in projects that are needed or desired for the District’s school buildings. The total capital needs are about $105 million.
If the referendum is approved, the District would have a total of about $20.8 million for capital projects during the next eight years. This would enable the District to fund some needed projects on a prioritized basis, such as installing double-vestibule entrances for five remaining schools, replacing some air-handler units and boilers, and making some roofing and masonry repairs. Without it, the District would have just over $5 million.
Threats From Springfield
While the referendum is structured to sustain the District for the next eight years, the funding could provide a way for the District to survive if the State legislature cuts State funding to District 65 or freezes property taxes.
On Feb. 1, a bipartisan Commission issued a report to the General Assembly and Governor Bruce Rauner, laying out the broad parameters of a way to reform how the State funds education. While many details are not pinned down, if previous bills passed by the Senate are a guide, District 65 could lose about $6.5 million per year in State funding once a phase-in period is complete.
In addition, if a two-year property tax freeze goes into effect, District 65’s projected deficits would increase by about $1.6 million in year one, $3.2 million in year two, and about $3.2 million in each succeeding year.
If the property tax freeze is permanent (as requested by Gov. Rauner), the impact in year three and going forward would be significantly greater.
While it is unclear what the State will do, the risks are significant. In recent months, there is also uncertainty around federal funding.
How Will the Referendum Help African American and Hispanic Children?
Some people have asked why they should vote for the referendum in light of the achievement gap between black and Hispanic children, on one hand, and white children, on the other. We have reported on this issue for 19 years, and on the many programs implemented to address it. We, like many people in the community, are disheartened by the results. We have no doubt that teachers, administrators, and School Board members – who devote their lives and countless hours to educating children – are disheartened as well.
We believe, though, the Referendum will benefit all children, including black and Hispanic children. Conversely, if it fails, all children, including black and Hispanic children will suffer. We make three observations.
First, the School Board has adopted high expectations for all students, and has set goals that all students be on track to college readiness and that achievement gaps decrease. The benchmarks used to measure on track to college readiness set a high bar. On a nationwide basis, only 37% of all students meet the benchmark in reading, and fewer do in math.
In 2016, 33% of black students and 39% of Hispanic students at District 65 met the benchmark in reading, which percentages are near or above the national average. Many black and Hispanic students are thus succeeding at high levels in the District. But much work remains, and the District has expressly committed to raising the achievement of all students while eliminating the racial predictability of achievement.
Second, the District is increasing the rigor of its curriculum and instruction to prepare all students to succeed, and it is providing interventions to address the needs of striving students. In addition, though, the District is attempting to address the needs of students in a holistic fashion, including by providing social and emotional learning; improving the climate of the schools, so all students feel as though they are owners of their school and a valued part of the school environment; providing equity training to Board members, administrators, teachers, and support staff to address issues of institutional racism and the marginalization of children; and taking steps to hire the best teachers and principals and that reflect the diversity of the schools.
Leading advocates for equity say that a holistic framework is essential and the only way that sustainable progress will be made.
Third, the District’s achievement report shows some promising signs. In the last two years, the percentage of black students meeting expected growth targets increased by 11 percentage points in both math and reading. The increase for Hispanic students was 4 points in math and 8 in reading. For white students, the increase was 9 points in math and 11 in reading.
All students are showing growth, and about the same percentage of black and Hispanic students are meeting annual growth targets as white students. The educational program is benefiting all students.
In addition, there are other indicators that evidence the Board’s and District’s commitment to equity. School Climate Action Teams have been set up in 12 of the District’s 18 schools, and teams will be set up in the remaining schools next year. Equity training is at the forefront. Of the new employees hired in the last school year, 39% are persons of color, compared to 20% in the prior year. The District hired four new principals in the last two years, three of whom were African American. The current School Board has appointed three people to the Board in the last three years; two are African American and one is Hispanic.
Impact on Taxpayers
The District presented a table showing the impact of the referendum on property owners. A property owner who paid the average property tax bill of $8,076 in 2016 would see an increase of about $470 in property taxes per year, if the referendum were approved, or about $39 a month.
A property owner who paid $4,000 in property taxes would see an increase of $233 per year, and a property owner who paid $12,000 would see an increase of $698 per year. The increases are about 5.8% across the board, according to the table.
Property owners who have children in school will receive a direct benefit. We think, though, all property owners benefit because good schools enhance the community and reflect the values we share. Also, research shows that property values increase when a community has good schools.
Conclusion
The referendum funding is essential to maintain the quality of our schools, the quality of education for all of our children, and the fabric of our community. We strongly support it.