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Thanks to a state law that puts a cap on property tax increases, the Evanston/Skokie School District 65 is faced with finding a way to deal with what it calls a “structural budget deficit” in future years.

The current year’s budget is pretty well set and promises a small surplus, but rising enrollment and swelling cost increases pose a situation that calls for exercising long-term options that may not set well with taxpayers or other stakeholders, such as parents and teachers.

Superintendent Paul Goren outlined the problem for the board’s Finance Committee at its regular monthly meeting Tuesday night.

The state’s budget problems, caused primarily by burgeoning employee pension obligations, create an aura of uncertainty about the future, but the property tax caps pose an immediate problem that is unlikely to disappear and would even be worse if a threatened property tax freeze were imposed by the state, Goren said.

Basically, the district is currently limited to a property tax increase that is capped by the increase in the consumer price index (CPI) which is considerably less than increases that are actually occurring in major portions of the district’s expense categories.

CPI increases for the last ten years have been averaging less than 2 percent annually, due largely to lower oil prices, Goren noted, while expenses for salaries and benefits, which constitute some 84 percent of the district’s budget, have been rising at a much faster rate, as are several other expense categories.

Property taxes represent about 76 percent of the district’s total revenues.

When expense growth is faster than revenue growth, Goren said, it causes a structural deficit that requires annual cuts in staff and programs that are ultimately unsustainable.

On top of that, enrollment increases have forced the district to hire more teachers, assistants, and support staff that swells the expense side even further.

Over the past 10 years, Goren noted, the district has seen an 18 percent rise in student enrollment that translates to more than $1.5 million a year in higher salaries and benefits. However, the district only receives about $350,000 annually in new property taxes.

In the next few months, Goren proposes to encourage community stakeholders to suggest options for the board and administration to consider. His staff, of course, will be doing the same, as will board members, either individually or collectively.

His hope is to marshal the collective thinking of the district’s best minds, as well as to examine best practices adopted by comparable school districts, to come up with various options for the school board to consider.

Goren’s plan is to gather this information during the next few months in order that viable options can be presented to the board for discussion in December.

The superintendent cautioned that it is one thing to develop a “wish list,” but “we have to go with a reality list.”

Board Vice President Richard Rykhus accepted the challenge and observed that “some factors, such as CPI and enrollment, we have no control over, but there are other factors that we do have control over.”

Charles Bartling

A resident of Evanston since 1975, Chuck Bartling holds a master’s degree in journalism from Northwestern University and has extensive experience as a reporter and editor for daily newspapers, radio...

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4 Comments

  1. Start here

    Combine district 65 and 202 and get rid of all the excess administrative personnel and the cost (pension, salary ,medical) that go along with them. Problem solved!

    1. Raise taxes? Limit pay increases? Consolidate services?

      When wages and benefits are 80% of your cost structure and growing at 4-6% and your revenues (taxes) are growing at 1-3%, that's a long term problem.

      What can we do? Raise taxes – (Ouch, my salary hasn't been growing) Give smaller pay increases to D65 personnel (Ouch, they won't be happy) or you can consolidate duplicative services with D65 & D202 as "I a person" suggests. 

      This isn't a complicated issue, but it is an emotional and political one that the Evanston community is going to have to grapple with in the very near future. 

      Do people want higher taxes or do people want to see more cooperation and cost savings with D202 & D65?

    2. School Consolidation—Long overdue
      We can count on school officials to claim it would cost more money—after all it is their jobs they want to protect—and “paid” consultants who claim the same—after all the more bureaucrats, the more contracts and who would hire them if they recommend cutting the jobs of those that hire them.
      Bottom line, more administration or more teachers and money devoted to education. Eventually the money–taxpayer patience and wallets will run dry.

    3. Consolidation doesn’t fix the trending problem

      While I don't disagree that consolidation, or as has been discussed over the last few years, virtual consolidation, would have many benefits, it will not address the long term structural problem discussed.  Sure, there may be some savings and efficiencies that could come out of that, but if pay and benefit costs continue to increase at 4-6% while taxes continue to increase at 1-3%, those savings don't solve the problem, they just kick the day of reckoning down the road a few more years.  That is essentially what has been done with the various staffing cuts enacted over the last decade.  The long term solution is to tie pay increase provisions in all the employment contracts much more closely to CPI, which by law limits tax increases.  If income and expenses are increasing at the same rate, we won't keep having the discussion of which positions are expendable.

       

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