One of Northbrook's school districts will vote on an emergency $3 million loan this Thursday while others expect to dip deeply into cash reserves as Cook County's chronically late tax bills approach a record for delayed payments to the schools this year.
Meanwhile, a pending property tax appeal by a major Northbrook property-holder, Allstate, could cut as much as $10 million more from the districts' budgets.
But in spite of these threats to school budgets and the lingering recession, Northbrook schools are still in better shape than the Chicago Public School system, where state budget shortfalls have led to hundreds of teacher layoffs.
"At a time when many school districts are struggling, District 225 has maintained its financial stability through the support of our communities and the implementation of proactive cost-reduction strategies," said Skip Shein, District 225 board president. The district, which includes both Glenbrook North and South high schools, recently passed a balanced budget built on the expectation that state funding would be severely reduced, according to district spokeswoman Karen Geddeis.
Northbrook schools' comparatively stable finances can be explained by deep reserves--as much as 61 percent of the budget in District 225--and minimal reliance on state funding.
The average Illinois public school district gets 28 percent of its funding from the state, while Northbrook school districts all rely on state funding percentages in the low single digits. That is one reason districts 225, 27, 28, 30 and 31 all were able to pass balanced budgets for the year.
But they are heavily reliant on local property taxes, and district superintendents say a variety of factors has made it increasingly difficult to predict how much money they will get – and when.
This is the 33rd year in a row that Cook County has mailed bills later than its Sept. 1 target date, and Treasurer's Office employees say a recession-driven record number of appeals to appraisals are one reason they likely won't be mailed before Nov. 22.
The District 31 Board of Education will hold an emergency meeting this Thursday to approve $3 million in bonds so it can pay its employees as it waits for the treasurer's office to send bills, collect taxes and send the revenue to the schools.
"This is a tremendous challenge for all the schools in the West Northfield area," said District 31 Superintendant Alexandra Nicholson.
"We have had to rely on our working cash fund because much of our state and federal revenue has been eliminated."
The district's cash fund—a kind of savings account —is down from $4.9 million at the July 1 start of the fiscal year to $1.9 million now, Nicholson said. The $1.9 million figure is about 15 percent of the $13 million budget—less than the 25 percent target set by the Board of Education.
The board plans to issue a total of $6 million in bonds this year—$3 million for building improvements and $3 million in working cash to keep the schools running until Cook County pays up.
But there is more potential trouble on the horizon for District 31 if one of the largest local property owners wins its appeal for a $10 million tax rebate. That would take another $3.3 million bite out of the district's finances, and its lawyers have filed formal objections.
The two-elementary-school district had to give back $2.5 million three years ago after a successful appeal by Allstate. Nicholson said that was "devastating" to district finances and one reason its reserves are so low now.
She said the district has saved hundreds of thousands of dollars by eliminating assistants that laminate and Xerox for teachers, rebidding contracts and changing its phone system. But there isn't much else to cut that won't affect students.
"We could maintain the programs the way they are," Nicholson said. "But if we have to give back millions or more dollars we may be faced with some tough decisions."
It's unclear when the current appeal will be decided.
Other Northbrook districts routinely keep large reserves, including District 27, which holds six months in savings.
"We have actually tried to save up a little more than that," said Superintendent David Kroeze, "so when we are doing school improvements, instead of doing a referendum we just live within our means."
He said the late tax payments have become so routine that his district builds its finances around that assumption.
Like many of the districts, District 27 has been trying to cut expenses wherever possible. Due to declining enrollments it closed and razed one of its four elementary schools, Grove Elementary. He said the savings in administrative, utilities and staffing have been significant.
Meanwhile, the district continues to add enhancements for its students, including a new initiative this fall that heavily subsidizes the cost of a new netbook for every middle school student.
The district spent $350 each on 460 netbooks for its sixth, seventh and eigth grade students – plus software and support. The parents pay $60 per year, and at the end of middle school, the students keep them.
"The overall financial health of our district will be in a strong position for the foreseeable future," Kroeze said.
About this column: This story is part of a nationwide Patch series probing the economy's effect on local schools.