The village staff saw it coming. Neither school district has, even as I write this. Both school districts continue to seek maximum rate increases to try and keep up with deficit spending. But the piper that needs to be paid has abruptly shown up at the door. This may be the biggest influence on our local 58 and 99 school board elections, if anyone has the courage to bring it up at all.
School district officials should be concerned about this. 58 just signed a three year teacher contract guaranteeing 3-3.5% yearly pay raises. Non teachers are getting even more. 99 teachers are getting 3.85 and 3.44% raises their first two years of a four year contract, but the final two years are tied to the CPI, which as you can see is flatlined. It remains to be seen if teachers, accustomed to annual 3+% salary increases, will be content with no raises for two years.
Compounding the problem? For one, negative assessment multipliers of existing homes adjusting downward, reflecting loss of market values.
For a second, new construction has become a dicey affair. Both school districts are frozen at 1997 levels in the CBD TIF district, where the vast majority of new construction, and new tax growth, has occurred.
Third PTELL limits the maximum growth rate of one key compnent because it is directly tied to the CPI, which is flatlined and may even go negative. Has either school district budget officials considered these things? From attending 58’s budget presentation, the answer is a resounding NO. And from reading budget statements made by 99’s budget wonks, NO applies there too.
Why not? One reason may be that school budgets look backwards at real estate tax funding levels instead of projecting revenues forward like the village is doing.
One thing the state may try to do to avoid school districts having to budget for a decrease in their levy is to change the PTELL segment that relates to real estate taxes to a more advantageous index. One measures the increase in the cost of government;. That’s a doozy-the more our government spends, the more they can spend. most taxpayers will say “No thanks”, but taxpayers have no effective voice in Springfield.
The other is an employment cost index that rates salaries, health benefits, expenses of each employee. That probably won’t fly when Springfield figures out small business is pounding down employee costs every year because they have to in order to survive as an employer, but if the state can somehow define the measured area to avoid efficiently run small businesses, and concentrate the definition on the bloated corporations that routinely raise pay and perks well beyond what Jane and Joe taxpayer ever see, who knows.
In the meantime, 58 and 99 are going to have some serious shortfalls to revenue next year, shortfalls that they apparantly have not seen and have not planned for. So whomever gets elected to the school boards will have some serious problems barrelling down on them that have nothing to do with kids first and everything to do with short term and long term fiscal health.
In a sense, past spending habits have contributed to this mess. The schools simply added up the maximum rate increases available, and year over year shifted a bit more of the budget into personnel and away from kids and facilities. Facilities needs went from budget needs to referendum needs. Now the endless increases may grind to a halt.
Is it possible for our two school administrations to do more with less? This year 99 spent an extra million they had in reserves against a rainy day. But it just started to sprinkle, and the weathermen are predicting hurricanes, so the rainy day isn’t here yet. 58, as I’ve written about several times, just has demonstrated no clue about how to avoid falling into debt, even with blue skies and sunny days. So what will give? How will the shortfalls be made up? Reduced or suspended personnel salary increases, facility funding shortfalls, or kids moving to the back of the funding bus?
Board members and candidates, you may have to pick more then one, but unless you refuse to face reality, you will have to pick.