Cairo Association of Teachers - Newsletter

CAT Tracks for May 19, 2008 DELAY IN STATE AID?

School districts concerned about state aid payments

BY Kurt Erickson and Kenneth Lowe, THE SOUTHERN SPRINGFIELD BUREAU

SPRINGFIELD - School administrators are facing some tough math problems as the school year comes to an end.

As part of Gov. Rod Blagojevich's attempt to close a budget gap, he's threatening to push the last two general state aid payments of the school year from June into July.

That has school administrators furiously punching up numbers on their calculators, trying to figure out what effect the state's $390 million bookkeeping maneuver will have on their budgets.

The situation is dire for Gary Hill, superintendent of the Jonesboro school district in Southern Illinois. His district would lose about $150,000 in state aid should the payments be pushed back.

"We have no idea what we would do," Hill said. "We would have to be very creative because we don't have that type of reserve in the bank."

After dropping plans to cut funding to downstate agriculture programs such as 4-H and the University of Illinois Cooperative Extension, the governor has turned his sights on delaying payments to local school districts.

Blagojevich spokeswoman Kelley Quinn said the school aid delays are among at least three scenarios being discussed as a way to close the budget gap. Other possibilities include extending the time the state takes to pay its bills to hospitals and nursing homes and cuts to universities.

"Nothing has been determined," Quinn said.

For school districts, missing the final two payments adds up to a major hit.

State records show the school district in Pontiac would see a $310,000 shortfall in funds. The Sunnybrook grade school district in southern Cook County would see a $302,000 drop.

The Martinsville school district stands to miss out on $140,000 if the state withholds the payments.

"I guess since kids can't vote, schools are the easy marks when the state needs to make its own balance sheet look better," Martinsville Superintendent Jill Rogers said.

Unlike some districts that have no cash reserves, Rogers said her district will be able to use some of its existing money to stay afloat until the state aid comes.

Other districts that have no cash reserves will have to take out short-term loans to meet payroll.

David Grace, interim superintendent of the Hoover-Schrum grade school district in Calumet City, said the shortfall will cut into the amount of interest the 950-student district earns.

"It comes at a cost for all of us," Grace said. "If I am not able to balance my district's budget, I might lose my job."

At the Hampton school district north of the Quad-Cities, Superintendent Tom Berg said missing June payments will unbalance the school district's budget.

"For us, we'll be able to pay our bills," Berg said. "If (payments) are delayed until July that's one issue - if we don't receive them at all, that's a major issue."

The threat has drawn the ire not just of school administrators. More than 1,000 rank-and-file teachers descended on the Capitol last month to urge state officials to not delay the payments.

A top teachers' union official, Illinois Education Association Vice President Robert Blade, said the threat of losing the final two payments could pull the "fiscal rug" out from under financially strapped districts.

"Some districts are considering taking out loans to ensure cash flow, which would mean spending money on interest instead of on classroom needs," Blade said.

State Rep. David Reis, R-Willow Hill, said he's getting a lot of phone calls from school officials who are upset that the state promised nearly $400 million in additional funding this year, but is now threatening to cut it.

"Now the governor can't say he increased funding for schools," Reis said.

State Rep. Bob Flider, D-Mount Zion, said lawmakers are upset because the governor should have managed the state's budget better in order to make sure there is enough money for schools at the end of the fiscal year.

"The trust level here is at an all-time low," Flider said.

Meanwhile, the trouble with the state aid payments is just one element of the unfolding budget battle that is expected to begin heating up next week.

Key legislative budget negotiators say there is little chance the General Assembly will come to any agreement on a budget by the scheduled adjournment date of May 29.

Rather, most believe lawmakers will wait until the state is virtually running out of money to pay workers before feeling the pressure to hammer out a last-minute, 11th-hour spending plan that keeps state government afloat until after the November election.

The fiscal year ends June 30. The first paychecks for the next fiscal year start going out in mid-July.

"I don't think we're going to finish. There clearly is not consensus," said state Sen. Christine Radogno, R-Lemont.