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Education and Family

Unit 5 Finance Committee Takes On Growing Structural Deficit

Unit 5 school district runs the risk of a near $20 million structural deficit if steps are not taken to increase revenue.

The Unit 5 Finance Committee met Wednesday night for preliminary discussions on how to address the district’s growing education fund deficit.

If no action is taken on the present $6 million structural deficit, that number will grow to nearly $20 million in the next five years.

The deficit is due in part to the district’s social-emotional learning initiative and increasing teacher and substitute pay, which still sit lowest among local school districts and districts of comparative size.

School Board and Finance Committee member Amy Roser put it simply: “Social-emotional needs have a direct impact on the education fund, and a direct impact on our community.”

She pointed to the increase in youth gun violence over the last year as reasoning to focus on the needs of students outside of just education.

To address the deficit without cutting programs and staff, the district either has to reduce expenses, which Superintendent Mark Daniel said Unit 5 has been doing for many years, or find ways to bring in additional revenue.

Daniel said there are a few options for the board of education to consider, “i.e. working cash, which we had to do last year and will continue to do this year. Or you look at some type of referendum. A third component is you do have a 1% sales tax that can be used, but that has a limited use.”

Working cash bonds are well-known to Unit 5 as a short-term solution. Last summer the district sold more than $16 million in working cash fund bonds to plug last year’s structural deficit without cutting education expenses. But working cash bonds just kick the can down the road as bonds accumulate fees and interest over time.

And the third option, the 1% sales tax, cannot be applied to the education fund. Presently, the revenue it generates would mean more updated schools and facilities, not better education for students. Legislation could change that in the future, but Daniel said the district has to plan now.

“So as we project out our revenue and our expenses for the next five years, using what I’ll say are conservative figures, we know we have to cover ‘x’ amount of dollars in our budget. You can go through the various scenarios and then ask yourself, ‘What would that actually mean to a property tax owner?’”

Unit 5 receives 60% of its revenue from local property tax dollars. That tax levy is at a rate of 5.39%. Comparatively, that ranks the district third lowest out of 10 local school districts.

The education fund sees 2.72% of that total — the lowest percentage of those same schools.

The Finance Committee said when it comes to a referendum, it would have one goal: maintaining that 5.39% as best as possible. That means working the funding system from within and shuffling how overall revenue is disbursed into 11 categories.

Those categories include the education fund, bonds and interest, operations and maintenance, the Illinois Municipal Retirement Fund, transportation, working cash bonds, fire prevention and safety, special education, tort, social security, and leasing.

With no additional revenue, Daniel continues to say the district will be forced to cut at least 120 teachers and various programs to stop the bleeding.

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