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School districts cope with declining state aid

Funding from state continues to drop

Published: Saturday, Feb. 2, 2013 1:15 a.m. CDT

ROCK FALLS – Superintendent Dan Arickx grimaces at the mention of state aid to school districts.

His district, Rock Falls District No. 13, includes two elementary schools and a middle school and covers 8 square miles. It depends heavily on state aid, which is based in part on a district’s local funding sources.

For most districts in the Sauk Valley, state aid makes up 25 percent to 35 percent of their revenue. But the Rock Falls district, with its low tax base, counts on the state for more than 50 percent.

State aid, which has decreased in the past few years, is set to hit an all-time low next year. Area school districts have lost out on hundreds of thousands of dollars – if not millions – in aid over the past few years and are feeling the pinch. Local officials are worried about next year and years to come.

Opposite of Robin Hood’

Illinois school districts receive general state aid based on a formula that ensures state and local funding (property taxes) together meet a minimum foundation level – an amount set by the Legislature believed to adequately fund the education of one student in the state public schools system.

The foundation level this year is $6,119 per student, which is unchanged since 2010.

But the Legislature in the past 2 years has not appropriated enough general state aid to fully fund school districts. In fiscal year 2012 (last school year), state aid was prorated at 95 percent of the amount owed to districts under a formula in state law. And in fiscal year 2013 (this school year), state aid was prorated at 89 percent.

Next year, state aid is slated to be prorated at just 80 percent, a historical low.

Illinois districts that have plenty of local resources – that is, they meet or even exceed the foundation level – still receive some state aid. Those districts receive either 5 percent to 7 percent of the foundation level per student or a flat $218 per student, depending on the amount of local resources available to them.

Arickx points to the inequality of state funding as his primary frustration: Districts with larger, wealthier tax bases hardly are affected by cuts to state aid. Those districts, such as Eastland, Nelson and Erie in this area, still receive state aid. But districts with smaller, poorer tax bases bear the brunt of cuts to state aid. Those districts, such as Rock Falls, lose significant portions of their budgets.

“If it’s [state aid] 30 percent of your funding, and you lose 20 percent of that ... you lose 6 percent of your total,” Arickx says. “For us, it’s 50 percent of our funding, so we lose 10 percent of our total.

“The more dependent on state aid you are, the bigger the hit you take,” he said. “It’s the opposite of Robin Hood. You’re still providing that money to districts that don’t really need it instead of giving it to districts that do really need it.”

The Rock Falls Elementary School District has, in the past 2 years, missed out on more than $825,000 in state aid. The district next year will lose more than $1 million. That’s almost $2 million in 3 years.

“It’s painful,” Arickx says.

‘We live and die by it’

Sterling Public Schools, the largest district in the Sauk Valley, is extremely dependent on state aid: about 30 percent of its revenue. The district has lost out on more than $1.6 million in state aid in the past 2 years and is set to lose an additional $2.1 million next year.

The district has survived on its cash reserves, as well as a vigilant 3-year budget-reduction plan that has slashed $1.7 million in expenses the past 2 years.

Superintendent Tad Everett says the reductions the district has made so far, plus the $950,000 in cuts it will make for the coming year, add up to almost the same amount the district has lost in aid.

“It’s all about state aid for us,” he said. “We live and die by it, unfortunately.

“We’re going to need to make significant cuts that will unfortunately impact student programs and teachers and administrators,” he adds. “It will be deeper this year than it has been in a long time. And the cause of this is all about one thing: the reduction in general state aid.”

The Dixon School District, by comparison, gets about 20 percent of its revenue from state aid. The district has treaded water thanks to its fund balances.

But Superintendent Michael Juenger says they won’t last long.

“It’s hard to keep up with some of these things,” he said. “There’s only one place it [cuts] can come from. ... That’s personnel.”

The Rock Falls Elementary School District has coped largely because of some good luck.

The district has had several retirements in the past few years; it has replaced highly paid veteran staff with lower-salaried new staff and seen a “huge cost savings,” Arickx says.

The district also has reaped the benefits of annexing the former Riverdale School District; that annexation not only brought in 60 more students, which means more state aid, but also included incentive money.

“The problem is ... none of that is ongoing,” Arickx says. “With the lower state aid, unless that starts coming back up and helping us, we’re going to be in a deficit before too many years. But for the meantime, the timing was good for us. We had options to offset the lost revenue.”

The district likely will get by for another year on its fund balances.

“It’s the year after that that really concerns me,” Arickx admits. “If that general state aid doesn’t start coming back around, ... we’re going to have to consider some serious cuts.”

‘Awful and helpless feeling’

The fate of general state aid lies with the Legislature.

The Education Funding Advisory Board last week recommended more than $4.7 billion in additional funding for public schools.

The group, which makes recommendations to the Legislature concerning state aid, reports that adequate funding would mean an increase of $2,553 per student, raising the foundation level to $8,672 per student, or an additional $4.7 billion in state spending for.

The Illinois State Board of Education last week approved a 2014 budget recommendation that includes more than $874 million, or a 13.4 percent increase, in state funding over the current year in an effort to support schools better.

The board has asked the Legislature to approve an increase of $745 million for general state aid, providing a total of about $5 billion to fully fund claims at the $6,119 per student foundation level.

Despite those recommendations, local officials have little hope for any increase.

“It’s an awful and helpless feeling,” Juenger says. “You work and your staff works very hard at building up programs ... and to assist students, and as you see the results, the good things coming from that, and then you know you might not be able to maintain some of the things you had, that’s where the hard part is at.”

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