From construction paper for kindergarteners to reconstruction of buildings where those kindergarteners learn, inflation will take a big bite out of revenues for Evanston/Skokie School District 65 in the upcoming budget.

The big reason? For the first time since Illinois’ property tax limitation law took effect in 1991, inflation is so high that that revenue collections will be capped at a 5% increase, even though the cost of living (and buying things for schools) is jumping at a higher rate.

The cap law restricts how many additional property tax dollars a school system can collect in a budget year to either 5% more, or to the rate of increase in the Consumer Price Index, whichever is lower.

In the last budget year, for example,the CPI was only 1.4%, so the cap did not take effect.

But now, Chief Financial Officer Raphael Obafemi told a school board committee on Monday that “the cost of everything that the district spends its money on has gone up.”

Distrct 65 Business Manager Kathy Zalewski and Chief Finance Officer Raphael Obafemi.

The school system, he said, “is not immune from inflation.”

A particularly dramatic example is the cost of much-needed renovations for District 65’s aging buildings, which average 77 years old.

Washinigton Elementary, built in 1901, is District 65’s oldest school.

Earlier this year, the district’s Master Facilities Plan said that repairs needed for all 18 schools would cost $189 million.

But inflation, Obafemi said, now pushes that to about $215 million.

Of course, those amounts are just a present snapshot in time, and there’s no way all the work can be done at once. With a roughly $150 million annual budget, mostly for employees, fixing everything simultaneously would wipe the district out.

It’s a long-term project, perhaps over 10-20 years, but Obafemi said it’s time to get going.

“We really need to start doing something about our facilities,” he told the board members.

“We know our facilities are in bad shape.”

Superintendent Devon Horton said that next month, the administration will propose how to spend $6-7 million on building improvements.

For the past few years, when interest rates were lower, the district was actually able to refinance some bonds, and use the savings for capital projects, such as installing energy-saving LED lights in 11 school buildings.

But with interest rates skyrocketing now, such savings are no longer possible.

Adding to the complexity is the way Illinois’ school finance laws are written.

Under the cap law, the CPI is determined by the nationwide urban consumer price index for December, which in this case is December, 2021.

That’s 7%.

But the year-long urban CPI up ’til now, according to the federal Bureau of Labor Statistics, is an increase of 8.2%.

Do the math. Costs are going up 8.2%, yet the district is capped at a 5% property tax increase.

(It’s also important to note that an individual’s property tax might go up more than 5% or it might go up less. There are a variety of factors such as property valuation and tax level appeals. The 5% cap law covers total district property tax collections.)

Now throw in this: Two of District 65’s labor union contracts, Clerical/Secretarial Workers and Child Care Professionals are expiring and will be renegotiated.

The unions won’t want any raises eaten up by inflation, but the district won’t want to give big pay hikes which could set a precedent for other unions,such as the teachers, down the road.

And there’s yet another factor, a potential recession. If that happens, future school district revenue will decrease, even if the system is locked into higher labor or construction costs now.

Construction costs could also fluctuate, at least in theory, for the new $40 million 5th Ward school the board has voted to build. Completion is not expected until spring, 2025, but inflation could be a wild card for the total price tag.

Of course, taxpayers may just ask “why not cut costs?”

Finance Committee Chair Joey Hailpern noted that “economic times are tough for everyone. People in the community say you’ve survived before with less.”

There have already been budget cuts, and more are likely as the number of District 65 students continues to decline. But budget cuts create more controversy, with jobs being eliminated, programs being chopped, and the long-term possibility of closing school buildings as part of the student reassignment process. (The Bessie Rhodes building is already slated for shutdown once the 5th Ward school opens, with the Rhodes program becoming a “school within a school” in Ward 5. Other closings are at least a potentiality).

However the difficult decisions play out, Obafemi told the board members “we plan to continue to live within our means. We will never run a deficit.”

Jeff Hirsh joined the Evanston Now reporting team in 2020 after a 40-year award-winning career as a broadcast journalist in Cincinnati, Ohio.

Join the Conversation

8 Comments

  1. I find it hard to believe the majority of Evanstonians understand or support the insistence on building a $40mil+ new school only ~2000 feet from an existing middle school and elementary school considering the current financial situation, decreasing enrollment, and the capital improvement needs for the existing facilities. Make it make sense please…

    1. The Superintendent essentially acknowledged that the majority of Evanstonians were not interested in the district spending money on a new school which is why he said they chose not to use the referendum process to raise the money. He knew it would fail.

      Instead they are using this risky “reverse mortgage” which essentially relies on taking money from the operating budget each year to service the debt.

      That means there will be less money available to maintain the current physical plant, hire teachers, etc….

      You can see Horton’s statement here about bypassing the public (appx 25 minutes in):

      https://youtu.be/20HiDO17g1o?t=1533

      This contempt for taxpayers is typical of how he’s run the district–Look at the half million he spent on a personal bodyguard crew.

      The real culprits are the board who hired this guy and has operated with similar contempt for the public. Lets hope those up for reelection get replaced next year.

  2. I agree with City Observer.
    Secondly, WAY TOO much money was spent on the Robert Crown Center.
    Start making fiscally sound and realistic decisions. Try imagining it was your own money and budget when making these decisions.

    1. M.A., have you been to Crown on a weeknight or Friday night? It is constantly packed. You can’t even find a parking spot. Clearly demand for that facility is very high. There is no other park asset like it in the city. You can’t compare Crown to a new school. The fields are loaded with kids. It is such an asset to our community. Anyone who thinks Crown was a mistake is not spending time there and looking with open eyes.

      1. Robert Crown is worth every penny. They need to keep dumping money into it and adding on to it if they can. It’s amazing for kids, so many programs, sports, etc for them to do. The athletic fields are top notch and are utilized by everyone …. male/female/binary/non-binary + every race & religion in the world.

        I want my tax dollars going there.

        I’m not saying you’re wrong, but ya ain’t right.

  3. Why has the school board allowed $200 MILLION worth of repairs to pile up? You aren’t living within your means if you avoid a deficit by allowing school buildings to fall apart. Parents weren’t allowed to enter D65 schools during Covid so they have no idea how dilapidated some of them are. I have subbed recently and was shocked by the conditions in Orrington, Nichols, Dawes, and others. Why do D65 unions tolerate this? Why do we allow our children to go to school in buildings that haven’t been renovated in 50+ years?

  4. I fully support the new 5th ward school IF there are funds to make it happen. There is no magic pile of cash falling from the sky to fix all the issues in all the schools AND build a new one.

  5. There is no educational need for a Fifth Ward school, particularly given its proximity to existing schools as noted above. This school board needs to be voted out. My only hope is that Evanston as a community realizes this and there are solid candidates to run and people get out and vote for them.

    Also please don’t compare Robert Crown to the District 65 situation. Robert Crown was funded with a lot of private donations and the new building and fields are a tremendous asset to the community. There was a real need with Robert Crown unlike the manufactured need for a Fifth Ward school.

Leave a comment
The goal of our comment policy is to make the comments section a vibrant yet civil space. Treat each other with respect — even the people you disagree with. Whenever possible, provide links to credible documentary evidence to back up your factual claims.

Your email address will not be published. Required fields are marked *