Accelify Blog

School District Finances Rebound (IL)

March 30, 2011

Despite tight budgets that led to teacher layoffs and classroom cuts, fewer school districts landed on the state’s financial watch list this year, according to a report released Wednesday.

Two dozen school systems — or 2.8 percent of the state’s 868 districts — received the worst financial designation in the annual snapshot of districts’ financial health. That’s five fewer than last year.

Across Illinois, more than a third of school systems —– 327 — spent more money than they collected, down from 355 districts in 2009. Current budget projections suggest as many as 400 school districts could be in the red next year.

Illinois State Board of Education officials attributed the improved financial standing, seemingly at odds with the grim economic pi cture, to a one-time infusion of federal cash intended to stave off the worst of the educator layoffs and local belt-tightening that targeted everything from music classes to sports teams. To date, the federal stimulus has brought $2.8 billion to Illinois public education.

"There are still some difficult times for school districts out there. … They are trying to make some very hard, difficult decisions," said Deb Vespa, a division administrator for school business services with the state education agency.

In all, 2,102 public school teaching jobs were axed last spring, more than the 1,438 positions cut a year earlier, the state agency revealed this week in a separate report. The sum does not include data from 42 school districts, including Chicago Public Schools.

Each year, the state board studies how much districts save, how much debt they shoulder, how much money they keep in rainy-day reserves and how much they spend compared with how much they collect in revenue. The results determine the financial ranking that assigns districts to one of four categories.

Education officials adjusted the ratings to account for stalled state payments, in an ongoing symptom of Illinois’ budget woes. Eight districts facing financial difficulties because of delays in state payments for everything from transportation to special education and early childhood education were not placed on the watch list.

The backlog of unpaid bills to public schools now totals $934 million, a spokesman for the Illinois treasurer’s office said Wednesday. At this point last year, schools were owed $1 billion.

After the delay was accounted for, 69.6 percent of school districts got the top ranking — up from 66.5 percent a year ago. An additional 21.6 percent of districts placed in the second-highest category of financial review, down from 22.6 percent last year, state records show. And 6 percent of districts fell in the financial early warning, down from 7.6 percent a year ago, records show.

State board member Steven Gilford said he was a little surprised by the results. Even without the adjustment for stalled state payments, 65.8 percent of the state’s school systems would have earned the highest financial recognition.

"Which tells me the financial strength of the districts is pretty resilient, notwithstanding the backlog," Guilford said.