BELLEVILLE — Of the 45 districts on this year's financial watch list, more are in St. Clair County than any other county.
The Illinois State Board of Education, which met Wednesday in Belleville, listed 112 school districts in the two lowest categories of financial stability out of 865 districts in the state.
Robert Wolfe, ISBE's chief financial officer, said this is the highest-ever number of districts in the two lowest categories of early warning and watch lists.
Of those 112 districts, 45 are listed in "financial watch," which are the districts in the most financial difficulty.
Of those, seven are in St. Clair County: St. Libory Elementary, O'Fallon District 90, High Mount Elementary, Belleville High District 201 and unit districts in Cahokia, East St. Louis and Lebanon.
In Madison County, East Alton, Highland and Edwardsville are on the financial watch list.
Financial watch means each district can be certified in financial distress, which requires a financial plan and can make them eligible for a financial oversight panel.
"We have a lot of focus on East St. Louis, but there are six other similar districts here in this county that are experiencing the effects of the proration of general state aid," Wolfe said.
Those districts combined lost $18 million last year in state aid that was prorated by the state legislature, Wolfe said. In 2011-12, the state prorated its required state aid payments by 5 percent.
In 2012-13, the prorated amount was 11 percent, so Wolfe said he expects more dire numbers next year when the federal sequester also will show its effects.
State Superintendent Christopher Koch said the board is pushing the legislature to pay the schools what they are owed, because the districts can't cut budgets much further.
"There is no question instruction is being impacted statewide," Koch said. "There's only so much money."
But Koch said it is better for the state to properly educate the kids who will grow up to be the work force and taxpayers.
"It shouldn't be looked at as spending, but as investment," he said.
Wolfe said many of the most affected districts are more reliant on state aid than average, usually because of low property values. With 10 districts in the metro-east and three in Cook County, the remaining 32 districts are spread across 27 counties.
Statewide, more than 66 percent of school districts are in deficit spending.
"There's a lack of options for districts to come up with creative solutions," Koch said.
District 189 is running a deficit of $3.2 million, projected to $6.9 million the next year and $19.7 million in fiscal year 2014. Despite cutting 43 percent of its staff and closing seven schools in the last few years, East St. Louis is projected to run out of cash by May.
The state legislature has allocated a $9 million grant to keep East St. Louis solvent through September, while the district and its financial oversight panel -- appointed May 2012 -- try to cut another $10 million from its budget.
District 189 is dependent on state money for 70 percent of its total revenue and 23 percent from the federal government. Only 7 percent of District 189 money comes from local dollars, which is a different division than most school districts.
In most cases, schools get 55 percent of money from local taxes, 32.5 percent from the state and 12.5 percent from the federal government.
A main reason, according to the ISBE report, is that East St. Louis has an extremely low property value per student, only $17,010, as compared to the state average of $289,272.
The report states that District 189 is negotiating its labor contracts and considering closing more schools, cutting more staff, eliminating music, band, art and athletics and considering a borrowing program.
The grant would sustain cash flow through September 2013, and with $10 million in additional budget cuts, the district's finances would be sustained through February 2014, as estimated by ISBE.
The ISBE report indicates that if the prorated payments continue, many districts will require supplemental appropriations like this.
Koch recommended that the grant be approved. However, board President Gery Chico pulled the grant from the agenda because of pending litigation. The board did not take any action on the grant.
Koch said many have asked why East St. Louis receives extra money when so many schools are in financial difficulty. He said some districts already opened discussions, and as the prorated payments continue and the effects of the federal sequester hit, he expects more districts will be asking for help.
"A much better solution is to fund at the statutory level, and then many of these districts will not see these problems," Koch said. "Everyone realizes this is critical."
Earlier this week, Belleville District 118 voted to lay off 26 people, including six teachers. Belleville District 201 has laid off four teachers with more reductions possible.
O'Fallon District 90 and Grant District 110 will ask voters on April 9 for a tax increase for their education funds.
Contact reporter Elizabeth Donald at edonald@bnd.com or 239-2507.
