Education Matters US

Big Hollow After Taxpayers Wallets Again

The School Board in Big Hollow School District 38 still has not gotten the message that they need to control spending instead of using threats to harm the education of the district’s children or using the taxpayers as their open wallet. They will once again put a tax increase on the ballot in February.

INGLESIDE — The Big Hollow School Board has voted unanimously to seek a tax hike referendum in February, but the amount of the referendum awaits financial projections from the district’s fiscal advisers.

A preliminary presentation by PMA consultants at this week’s School Board meeting showed the district “just hanging on barely” by 2012, with “deficits beginning to stabilize.”

In spite of now projecting a smaller deficit in 2012 than last year’s analysis indicated, PMA emphasized that without additional revenues, Big Hollow School District will still be on shaky ground in 2012, continuing its reliance on tax anticipation warrants and seeing class sizes approaching 40 at multiple grade levels.

The board’s next meeting will be held Oct. 15 at 7 p.m. in the Middle School’s multipurpose room. Tentative agenda items include PMA’s updated presentation, public comment on the referendum issue and any updates on the sale of the District’s property at routes 12 and 134.

As you can see, they are going after what appears to be a Working Cash Bond instead of the usual educational rate increase. This does lower the cost to the taxpayer, but is masking a larger issue of overspending by the district by allowing them to move working cash funds into other funds masking the true spending habits. In addition, the shifted working cash funds must be repaid each year, as described in the ISBE’s Mechanics of a School District Budget (excerpted below).

Page 10

Working Cash Fund (70)

If a separate tax is levied for working cash purposes or if bonds are sold for this purpose, this fund shall be created. Cash available in this fund may be loaned to any fund for which taxes are levied.

Page 22

Other Working Cash Fund Limitations

Section 20-6 of the Illinois School Code (105 ILCS 5/20-6) contains strong penalties for any member of a school board or any other person holding any office, trust, or employment under a school district who is found guilty of willful violation of any of the provisions of Article 20 (the Working Cash Fund).

Further limitations to the Working Cash Fund are included in the Tax Anticipation Note Act (50 ILCS 420/0.01). These limitations affect Working Cash Fund transfers when tax anticipation notes have been issued. The following is an excerpt from Section 5 of the Act:

Whenever the unit of government has established a Working Cash Fund, as provided by law, the tax rate shall not be reduced below the amount necessary to reimburse any money borrowed from the Working Cash Fund. It shall be the duty of the clerk or secretary of the unit of government, annually, not less than 30 days prior to the tax extension date, to certify to the county clerk the amount of money borrowed from the Working Cash Fund to be reimbursed from the specific tax levy. No reimbursement shall be made to the Working Cash Fund until there has been accumulated from the tax levy to pay the notes an amount sufficient to pay the principal of and interest on the notes to maturity. At such time as there are no notes outstanding, all proceeds of such levy shall be applied for the specific purpose or purposes for which the notes were issued.

Page 24

Working Cash Fund loans must be repaid upon the collection of anticipated taxes. Exceptions to the payment of Working Cash Fund loans exist when tax anticipation notes are outstanding.

You can read more about what the overspending and habits of the Big Hollow School District in the following links: