High Finance with Hentze:
District Budget and Finances Report (April 2015)
Governor Rauner imposed pro-rated cuts this week on mandated categorical payments to Illinois school Districts. These categorical payments include Special Education and Transportation monies for the District. Instead of paying the mandated 100% due to the District, the state is pro-rating these at 95%, which will result in the District having to adjust some budgeting figures to cover the cost of buses, out of District special education placements, and special education personnel. An estimated cost of this pro-ration will be about $101,000 for the District for the quarter. This is supposed to be a pro-ration that will help the state come at budget for the rest of FY2015. It is yet to be determined if future mandated categorical payments will also be pro-rated, and, if so, at what amount as the budget crisis continues to unfold. The state has also placed the District on an Early Warning list about finances, despite the fact that we are healthier than many surrounding Districts. As of 4/14/2015, the State of Illinois owes District 201 $3,619,498.86 in General State Aid.
Saint Clair County has completed the process of reassessment of property for 2015, and the new equalized assessed valuation (EAV) for the taxable property has dropped by 1.8318%. The EAV is the “taxable property value” that the District levies its tax rate on for local revenue. Loosely speaking, the EAV reflects the local “wealth” of the District, and a reduction will result in less local income for the District for the coming fiscal year. For example, the US Census Bureau reports that the median home price in St. Clair County is $123,700. The current EAV is taxed at 1.97%, which means the District gets, on average, $2,436.89 in revenue from each house. With the reduced assessment, this brings the taxable home value down to $121,343. At the current tax rate, District 201 will get $2390.46 in taxes, a difference of $46.42 for a house at the new assessed value. The question for the board will be whether to abate (hold the tax rate the same), which they have done for years or to implement an increase. The abatement will cost the District money while the increase will put more fiscal pressure on local homeowners. So far the District has not needed to use the $6 million line of credit approved by the board, but this seems likely to occur soon. The good news is that the District has such a high credit rating that there were over fifty banks competing for the line of credit.
In addition, the District is still in negotiation with Belleville and Fairview Heights for approval of TIF Districts in both communities. TIF Districts reduce property taxes for new builders to lure them into communities, but this also lowers the taxing value of the EAV for school Districts and other taxing bodies. District 201 is currently in negotiations, in conjunction with other taxing bodies such as Grant and William Holiday, to approve the TIF with a rebate to Districts as a portion of the revenue generated by any future construction. Both TIF negotiations are ongoing.
The District is beginning to look at some upcoming capital projects at East and West. These may be done though lease-purchase, an arrangement in which the District will lease equipment or supplies with payments going toward purchases. This allows the District to use funds other than the Education Fund to make purchases. Currently, lease-purchase funds have been used to upgrade technology on both campuses, as well as the purchase of the Goalby property next to Belleville West (this lease will be paid off in July). The next focus will be exploring the possibility of using lease-purchase funds to fix the main parking lot at Belleville East High School as well as the tracks on both campuses. The Belleville East track is 25 years old. The Belleville West track, while only around 10 years old, has been inspected and found to be in need of immediate repair to address degradation.
4/17/2015 11:44:41 am
Thanks for doing this! This is an easy way for me to get informed!
4/20/2015 08:14:42 am
No problem! Thanks for the feedback!
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Proud alumnus, union member, and educator in District #201 since 2006.
Dr. Hentze is the author of High Finance with Hentze, a monthly blog that provides news about District 201's current financial state.