$2M Deficit, Allstate Property Tax Refund Loom

When it comes to balancing the budget, the options for aren’t pretty. 

In April, voters  by a 2:1 ratio. Meanwhile, the cash-strapped district is fighting a legal battle with , one of the district’s biggest property taxpayers that has appealed its 2004-06 property taxes. If the Northbrook-based company wins its appeal, could lose $2 million or more—on top of an additional $2.3 million has already had to pay for tax appeals between 1992 and 2003.

So at last Thursday’s school board meeting, members had little choice but to vote for a budget with a $2 million deficit—anticipating the property tax refund that may be awarded to  this year.

“For a budget our size, that is a huge issue,” said Director of Business Services Cathy Lauria. 

In the future, could face yet another appeal from for property taxes from 2007-2009. The district has struck a deal with the assessor and the insurance company for 2010-2012 assessment. , however, have ravaged the district’s small budget—and only continue to get bigger.

After the tax referendum failed in April, cut funding for after-school sports programs and other activities and did not replace three staff members who retired--among other cost-cutting measures. .

Despite that $1 million reduction, revenues for 2011-12 still fall more than $2 million short of expenditures. Because the district’s combined fund balance--for example, its cash saved in reserve--is less than three times the amount of the deficit in its four main funds, administrators are required to submit a deficit reduction plan to the state this year. That plan includes the $1 million in cuts made after the referendum failed, as well as $3 million in cash fund bonds to be issued in fiscal 2012.

The district has already issued $3 million in bonds, after .

Although the district has had to make serious cuts, parents have often stepped in to fill the gap. At , donations are helping to make the Homework and P.E. clubs possible this year, while sports programs are going on at this fall due to gifts from the District 31 Education Foundation and the Parent Teacher Council.

The Education Foundation, in fact, went to work shortly after the referendum failed, for the district by July. Much of the money went to upgrade the schools’ computer labs.

Although and the seventh lowest in Illinois, school administrators are still unsure whether or not to put another property tax referendum on the ballot, given how the last one was received. Administrators also don’t yet know whether s 2004-06 property tax refund will affect the district’s budget during this fiscal year or the next one—but regardless, they have to prepare.

“The chances of us settling that case in this fiscal year are getting slimmer, we’ve been told,” said Superintendent Alexandra Nicholson. “We have to plan for it in case it happens.”

For now, the district is looking to cut spending any way it can—and continuing to fight Allstate in court. If the district’s cash reserves fall below 25 percent of its budget, it could go on the state’s watch list and ultimately be subjected to financial oversight from the Illinois Department of Education. 

“Hopefully we won’t get there,” Lauria said. “But we have to get through the storm.”