Monday, Nov. 02, 2009

Schools try to hold onto funds; state aid was supposed to be temporary

A decade ago, state leaders decided to overhaul the way schools were funded.

It created a backlash from schools that stood to lose money. So to soften the blow, the state agreed to give them some extra cash called "hold harmless" funds on a temporary basis to help them adjust their budgets for the new funding system.

"In the late 1990s, the legislature changed the general state aid funding formula, and some school districts were going to get less money that they received under the previous formula," Illinois State Board of Education spokesman Matt Vanover said. "The General Assembly put together hold harmless so those schools would never drop below the level of the previous formula. There is no sunset clause on hold harmless. Although it was designed to be temporary, it will remain until the General Assembly repeals it or decides not to fund it."

What was supposed to last three or four years has now been in place for about 10. But with the state in financial chaos, many thought this would be the year the temporary program finally was shelved.

Instead, the General Assembly has shelled out $20.2 million in hold-harmless money for 2010 to schools across the state. Nearly $1.2 million of that is going to schools in the metro-east.

Local school leaders say not only do they deserve hold harmless funds, it's their faulty school funding program that makes them necessary in the first place. Central School District in O'Fallon gets one of the biggest checks of Southern Illinois schools.

"Illinois is absolutely the worst state when it comes to school funding," said Steve Amizich, superintendent of O'Fallon's Central School District 4. "In most places, the state's share is about 50 percent. But in Illinois, it's currently about 25 percent, and we expect after hold harmless that it will be about 12 percent. That's why local school taxes are so high."

Central School District will get $197,505 in hold-harmless money in fiscal 2010, placing it behind only Wolf Branch School District 113's $197,707 and Venice District 3's $222,204 among metro-east schools for hold-harmless funding.

With a titanic struggle over the 2010 fiscal year budget, state leaders considered phasing out hold harmless this year. But instead, they decided to continue it on a year-to-year basis, reviewing the issue each year.

"It was decided that it would be funded at about 50 percent of the amount the schools on the list fell below the 1999 funding level," Vanover said. "But more schools fell below the 1999 level this year, so they were added into the mix and schools ended up with a little bit less than 50 percent."

State Rep. Tom Holbrook, D-Belleville, doubts hold harmless will go away any time soon. But he said schools are a priority for the state and that he thinks they are very well funded, considering the dire economic position Illinois is in.

"It was meant to be temporary," Holbrook said of hold harmless funding. But there is a tremendous inequity between upstate schools in more densely populated areas and the more rural schools in Southern Illinois. So this helps to make up some of the difference.

"But to say that the state doesn't support education isn't fair," Holbrook said. "Because of the dire financial times we are in, there are parts of education -- like everything else -- that aren't going to be funded. But education is the only area in state government funding that saw in increase in dollars spent. It is obviously a priority."

While it may make more sense to find a permanent solution to education funding, Holbrook said it doesn't look like that is on the horizon.

"I don't see any adjustments being made to the formula because of the state's financial situation," Holbrook said.

Until that happens, schools will just have to hope from year to year that that hold harmless money holds out.

"The state is systematically and incrementally pushing schools off a financial cliff," Amizich said. "They're pushing their responsibility off on local taxpayers, and that's why property taxes are so high."

Dennis Renner, a Ward 5 Alderman in O'Fallon who once served as a member of the Central School District Board, was shocked to hear that the school was still getting so much hold harmless money.

Renner said he disagrees that Central is underfunded and thinks it needs to spend more wisely to wean itself off hold harmless money.

When you look at the size of their staff and their salaries, it's pretty obvious that they have room to cut," Renner said. "And they just keep building and building when their enrollment numbers are flat."