Editorials

Lawmakers love to let schools add bond debt

Eighth grade language arts teacher Judy Herzog in 2011 put up decorations in her new classroom at Belle Valley School in Belleville. The district got state lawmakers to expand their borrowing limit so they could take on $40 million in debt over 30 years to build the school.
Eighth grade language arts teacher Judy Herzog in 2011 put up decorations in her new classroom at Belle Valley School in Belleville. The district got state lawmakers to expand their borrowing limit so they could take on $40 million in debt over 30 years to build the school. snagy@bnd.com

The Chicago Tribune recently analyzed the debt load of Illinois’ schools and found they collectively have $20 billion in bonds, or $10,000 in debt for every student in grades kindergarten through 12. The point of the story was that state lawmakers for decades passed special laws allowing school to borrow beyond statutory limits that were deemed fiscally prudent.

Triad Community Unit School District 2 was cited as an example of a district that got an exemption, but the legislation passed in 1998 never names the district through it describes it down to enrollment and property values. Triad High School was built as a result of the funding formula being molded to fit the district’s needs.

Data compiled by the Tribune shows other local school districts far exceed their normal debt limits and got state lawmakers to go along with changing the rules for them. Triad is now only slightly above the original statutory limit, but Belle Valley is about 650 percent above the limit, East St. Louis at 300 percent, Mascoutah at 240 percent and Cahokia at 175 percent of what should be their debt load.

Belle Valley had a debt limit of $6 million but got state lawmakers to change it so they could borrow $40 million in 2009 and repay it in 30 years instead of the usual 20. A single school replaced two aging schools, including one that was sinking into an old coal mine.

But then came the rub for Belle Valley’s property taxpayers: The recession hit and dropped property values, plus businesses protested their values and received reductions. The value of all property in the district is now 17 percent less than it was in 2008; Taxes to pay district debt on a $100,000 house went from $39 in 2008 to $355 the first year of the bonds and are now $639.

The Illinois State Board of Education monitors school district debt as part of its financial watch over districts, but there are no real penalties for borrowing more than the state guideline. At least there are no penalties for school leaders: For taxpayers the penalty is coughing up more for school facilities than you should and for students it’s having dollars tied up in the brick walls instead of in instruction.

Belleville School District 118 just announced it needs $26 million in improvements to secure school entrances, make repairs and add 21 classrooms. They have $7.2 million in existing debt and decided to limit the new borrowing to $20 million to stay within their $30 million limit.

Emergencies happen, growth happens, but it would be good to consider how many districts seek exceptions to the debt rule as St. Clair County taxpayers head to the polls in November. They are being asked to impose a 1 percent sales tax to pay school debt from construction and safety, with every district receiving a proportional share regardless of their fiscal realities.

Does your school district have the ability or discipline to use the sales tax revenue to reduce property taxes? Is it fiscally casual or will it find itself forced to use the sales tax as an add-on tax?

History does not inspire optimism that property owners will feel any less pinched. History shows the tax burden is the only guaranteed growth.

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