25 Percent Of Illinois School Districts Are Borrowing To Pay Bills
More than a quarter of all Illinois school districts had to borrow money to cover normal operating expenses in 2016, according to figures released this week by the Illinois State Board of Education.
Every year, the Board of Education gives school districts a grade for their financial health.
Overall, nearly three-quarters of the state’s 852 school districts earned top marks on the state review of their finances. But state schools Supt. Tony Smith said in many cases districts are able to show balanced budgets only after making deep cuts to school programs and personnel.
He said good marks on financial profiles “speaks to the business acumen of our districts.”
But he said the financial ratings don’t measure “the agony of those local board meetings … of the decisions to cut services to children and families.”
The state pointed to a troubling trend of more districts taking on long-term debt — not to construct schools or pay for other capital costs — but to cover normal operating expenses. That means some funds destined for teachers and books in future years will go toward interest payments instead. The state estimated more than half of districts will spend more than they take in during 2017.
The financial health of Chicago is dismal. The district is one of 19 on financial “watch,” the most serious of four categories the state assigns to districts after evaluating such things as expenditure-to-revenue ratios and short- and long-term borrowing ability.
Chicago spent $1.09 for every dollar it took in during 2016. And the district ended the year with just 12 days of cash on hand — far from the six-month reserve the state believes districts should have.
Chicago Public Schools did not dispute any of the figures cited by the state, but spokeswoman Emily Bittner used the opportunity to criticize Gov. Bruce Rauner.
“This is rich; the Governor vetoed $215 million in funding for Chicago students and then issued a report that was critical of our finances. The simple fact is that until the State ends its racially discriminatory funding of Chicago students, CPS’ finances will continue to deteriorate every year,” Bittner wrote in an email.
Other districts in the metro area on financial watch include Lincoln-Way High School District 210, Millburn Community Consolidated School District 24 in Wadsworth and Johnsburg District 12 in McHenry County.
The state developed its annual financial profile review in 2003.
Linda Lutton is an education reporter for WBEZ. Follow her on Twitter at @WBEZeducation.