Big Hollow Information
- on 02.02.08
- Funding Reform, General
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There have been several letters to the editor in the Daily Herald the past few days. They can be found here, here and here. Two of the three rely more on an emotional appeal than facts. This is because they appear to be scared of what the district will do next to their children. What programs will the district cut next to pressure the parents to give them more money. The remaining article is by the referendum co-chair, Phil Carter. In it he states the following:
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With enrollment growth outpacing revenue growth, the district has judiciously managed its per-pupil operational expenses consistent with two facts: (1) Big Hollow draws 75 percent of its total operating revenues from local funding, and 2) Big Hollow has the lowest operational tax rate in the area. Per-pupil expenditures are now the lowest in all of Lake County and more than $2,300 below the state average. The paltry district expenditures per pupil reflect the district’s commitment to fiscal responsibility, but they are not good for our children. |
As I have shown before, revenue is outpacing enrollment, not the other way around as Mr. Carter states. See the chart below.
| School Year | Total Revenue |
ADA | Revenue Per Pupil |
|---|---|---|---|
| 1990/91 | $1.851 Million | 340 | $5,441 |
| 2006/07 | $11.963 Million | 1,378 | $8,681 |
| Percent Increase |
546% | 305% | 59.5% |
* Source: Lake County Regional Office of Education — Annual Financial Data Report
* Illinois State Board of Education Report Card
Their revenue has increased 546% since 1990/1991 while their average daily attendance has increased only 305% over that same time period. This means their revenue per student has increased 59.5% from 5,441 dollars to 8,681 dollars. Again, revenue has clearly outpaced enrollment.
Since when was $8,681 per student paltry? I bet most of you had no idea that Big Hollow was spending over 8 thousand dollars to educate each and every child in the district. That total was from the 2006/2007 school year. This year it will be over 9 thousand dollars. How do I know that? Simple, State funding increased by $400 per child this school year and Big Hollow received an increase in the amount they levied from property taxes last year. They even increased their levy for this coming tax year.
I am amazed at times how reporters don’t question anything and just regurgitate numbers and answers spewed by the school districts. In particular, whenever I see that $5 million dollar sale figure, it is always stated that is just a stop gap. The next question that should be asked is if $5 million dollars is only a stop gap, how long will $10 million dollars last? They don’t ask this simple question and yet they continue to recommend approval of referendums.
Let’s get into bonds for a moment. The Daily Herald did a complete series on how bonds work and the money games that are played with them. Districts backload them so the cost to the taxpayer gets higher toward the end of the actual loan, meaning the taxpayer is paying more in interest early on instead of paying down the principal. The issuance type that according to Elizabeth Hennessey, of William Blair, is used by every district in Illinois are called Premiums Bonds. This type of bond allows districts to receive free money, i.e. money that they don’t have to repay or count against their debt limit. They get this free money on top of the bond issuance by agreeing to pay a higher interest rate. In other words, the district gets more money than approved in a referendum, while you the taxpayer get stuck with the higher bill because of the higher interest.
The following is an excerpt from my previous article about working cash bonds:
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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
Page 22
Page 24
You can read more about what the overspending and habits of the Big Hollow School District in the following links: |
Big Hollow has a spending problem. They do not have a revenue problem. Vote NO!
