The Examiner U-46 News Feed
State funding bill likely to change U-46 budget
By Seth Hancock
A public hearing on School District U-46’s Fiscal Year 2018 budget will take place at the upcoming Board of Education meeting on Monday, Sept. 11 with a vote expected on Sept. 25.
The budget reveals a deficit at $8.9 million with total spending at $517.9 million ($6.5 million increase from last year) and revenues at $509.1 ($3 million decrease). However, the budget will likely be amended as Gov. Bruce Rauner signed Senate Bill 1947 on Aug. 31, a so-called “evidence-based” school funding model.
Although full details aren’t available on SB1947, it will increase funding for education from the state, but how long can the state maintain this given its fiscal climate?
At the Aug. 21 board meeting, board member Phil Costello said the Illinois Department of Revenue’s Personal Property Replacement Tax 2018 estimates have come out, and the news is not favorable.
“The takeaway here is that the district will lose about $1 million, and I think more ominous is the fact the state continues to lose business,” Costello said. “I’m not going to translate that. It’s just a sign of the times that I think we all need to take note of.”
The replacement tax, according to the report, is the “tax or taxes… imposed by the General Assembly to replace revenue lost by units of government as a result of the abolition of ad valorem personal property taxes.”
U-46’s estimate from the report is $3.1 million, down from $4.1 million last year, and there is a projected 23.84 percent decline for the state. One of the leading reasons for the decline according to the report is a decline in business profits meaning businesses are either losing money or leaving the state.
The state’s current debt is $155.1 billion according to usdebtclock.org which also shows revenues rapidly declining but expenses rapidly increasing. The budget passed in July included a 32 percent increase in the personal state income tax rate and a 33.3 percent increase in the corporate tax rate, tax hikes that U-46 CEO Tony Sanders lobbied as he wrote via social media: “The state has no option than to increase revenues.”
The 2017 edition of the ranking of states for fiscal health from George Mason University’s Mercatus Center has Illinois at 49th overall, two spots down from 47th last year. The report states: “Illinois performs poorly on both a short- and long-run basis.”
Long-term liabilities more than doubled from 2014 to 2015 as the report states “long-term liabilities are 317 percent of total assets, or $12,118 per capita,” up from 148 percent in 2014.
The state’s population has seen the largest decrease in the nation for the third straight year according to Internal Revenue Service data, job growth is at 0.9 percent compared to the national average of 1.5 percent and nearly half that of every neighboring state from the Bureau of Labor Statistics (BLS) and from 2007 to 2016 the state has seen the lowest personal income growth in the country at 0.8 percent according to the U.S. Bureau of Economic Analysis.
What is the fiscal and educational climate within U-46?
Using the Illinois State Board of Education’s data and the BLS inflation calculator, revenue and expenditures have risen well beyond the rate of inflation over the last decade while enrollment has decreased and test scores have consistently been below the state average.
While academic results have lagged behind the state average, U-46 teachers have averaged $3,781 more each year than the state average over the past 10 years.
Both Costello and board member Jeanette Ward addressed concerns with enrollment projections when the FY2018 budget was presented on Aug. 14. According to the budget enrollment is expected to drop to 36,360 by 2020-21, a 10.6 percent decrease from 40,687 in 2012, but costs are expected to rise by 22.6 percent.
On SB1947, that comes after a failure to override or accept Rauner’s amendatory veto of SB1 for what he called a “bailout” of Chicago Public Schools (CPS), but the now approved formula maintains the “evidence-based” model of SB1. It was approved 38-13 by a state senate vote and 73-34 by the house, but the house earlier on the same day voted 61-46 against the same bill.
Sanders wrote in his recent weekly message: “This law was years in the making, and I’m proud to say I had a piece in pushing for the change…. As we move forward, this law will further bolster our funding and provide stable and reliable revenue from the state.”
Rep. Jeanne Ives (R-Wheaton) wrote in an online message that the CPS “bailout” Rauner opposed in SB1 is there in SB1947 noting Chicago Mayor Rahm Emanuel saying CPS will get everything “and more” from the bill. Ives said student outcomes are not addressed and “it is only input based” and the “taxpayers are about to get their pocket picked and the policy can’t stand on its own.”
Ives has opposed the “evidence-based” model altogether as she told The Examiner last spring the model strips away local control going as far as determining how many janitors a district must have, and Ward wrote on social media that because of “its unfunded mandates, and restrictions on local control - like telling school boards how many teachers to hire” she opposed the model.
Considering the continued poor fiscal health in Illinois and the lack of academic results in U-46, the public and board members may be poised to ask several difficult questions, such as, if the fiscal trends continue in Illinois, such as residents leaving the state in large numbers and the massive state debt, is there any concern that the state can’t afford this increase?