Funding Woes: The Frog in the Boiling Pot

It was 1967 when Golf School District 67 last went to taxpayers and requested more funding for school operations. Now, almost 45 years later, the district is floundering like a frog in a pot of simmering water, desperate to find a way to pull itself out of a financial crisis that threatens to drain the budget by 2013.

"At the end of 2013, our fund balance would drop below 25 percent of the total budget," said Supt. Jamie Reilly, who came to the district in July 2010. The state of Illinois recommends that its schools keep at least that much cash on hand so they'll be able to cover their expenses until the next time the district is paid. If the district's fund balance dips below 25 percent of its $8.7 million budget, it will have to borrow to cover its costs.

"We've been spending our fund balances down to the minimum amount," said Jim Fitton, the district's assistant business manager. 

Budget Breakdown

So, where did the money go? Over the past five years, Golf 67 has struggled with balancing its budget. 

• 2006–07: The district turned in an unbalanced budget that spent around $1.68 million more than it made. The budget suggested that no deficit reduction plan was required at the time.
• 2007–08: This year's budget did a little better but followed suit, with expenses outpacing revenues by about $1.36 million, but this time a deficit reduction plan was requested. The resulting four-year strategy proposed spending cuts that would result in decreasing deficits until they arrived at a $307,000 surplus by 2010–11.
• 2008–09: Things kept improving, if only slightly. This time, Golf spent $1.28 million more than it made. However, the new deficit reduction plan scrapped any notion of having a surplus in 2010–11 (the new forecast was $147,981 in the red) but hoped to be $302,000 in the black by 2011–12.
• 2009–10: The district balanced its budge and finished with $203,413 more than it spent.
• 2010–11: The budget sank again to a $587,163 deficit—nearly $900,000 away from where the district had planned to be with its 2008 plan. This year, however, no deficit reduction plan was required.
• In those five years, even the one when the budget was balanced, the district overspent its educational fund—usually by several hundred thousand dollars and twice by more than $1 million.

The district's financial pinch is a combination of things: increased costs compared to the tax rates set by the '67 referendum, the state-imposed cap on revenues, growing building maintenance and repair costs and more. What's particularly stressful for administrators is that they'll have to ask for a referendum at the tail end of one of the worst economic downturns in American history. Districts 70 and 63 both benefited from referendums in 2004, and now District 67 is anticipating that it will have to ask for another referendum within the next three to five years.

"We've cut back a lot and still overspent because our revenue doesn't come in quickly enough to cover our expenses, so we dip into savings a little bit every year," Fitton said. "So now we're at the point where we need to ask for money."

Those cuts, many of which were made by former superintendent Greg Buchanan—who now holds that position at Antioch School District 34—included teaching staff, supplies, the reading specialist, the guidance counselor and the librarian.

The water was heating up.

"It did buy some time, and right as I was leaving in 2010, we were also made aware that our equalized assessed value was increasing, so that helped," Buchanan said. "Pretty much the only thing left to do was increase class size."

"I didn't view it as a sinking ship," he added. "Usually you don't see a district go [without a referendum] for that long of a period of time. I have to give them credit for living within their means."

A Comparison with District 70

At one time, District 70 had financial problems similar to District 67's current distress.

District 70 originally had three school buildings—Grove School, Borg School and Park View School, which is still in operation today. As enrollment decreased in the 1970s, it became evident that three buildings weren't needed, so Borg was sold to Morton Grove and became the Village Hall.

Grove was sold shortly afterward and is now the Islamic MCC Full-Time School.

Six years after the 2004 referendum, District 70 now has a full year's budget in the bank. 

"That basically put us in a good financial position, and we expect it'll be that way for the next five to 10 years as well," said District 70 Supt. Gary Zabilka. "We've been fortunate in that since the referendum, we've spent less each year than projected."

But with the sale of Golf Middle School possibly going off the table, District 67 is left with few options.

Frog in the Pot

"We would really need to pass a referendum next spring," Reilly said, adding that an additional referendum would likely be needed so both their operating and building costs will be covered. "And if we don't, the state will say to us, 'Okay, you need a three-year plan for showing us how you're going to get back up there.' If the school can't handle it, that's when the state would come in and take over." 

Reilly said the new turn of events is concerning and that administrators are evaluating every possible avenue, including more drastic slicing.

"We would definitely be looking at increasing class sizes," she said. "We would definitely be looking at cutting programs."

Conventional country wisdom has an oft-told story about the best way to cook a frog. If it's tossed into water that's already hot, the frog will hop out. If it's placed in cool water that's gradually brought to a boil, it will sit happily until it gets cooked alive.

Golf School District 67 is trying to leap out.