Thursday, April 26, 2018

Alliance Call to Action




There are three initiatives pending before the Illinois House and Senate that need input from school management. Please take a few minutes to respond and share the possible impact on local schools districts if these bills would become law.

HB 5572 (Ives, R-Wheaton) is designed to prohibit a school district from refinancing debt past the repayment period of the original issue, issuing bonds beyond the time period established when the debt was issued, and incurring any kind of debt in excess of 13.8% (units) or 6.9% (duals) of the district's 2017 equalized assessed valuation (EAV) or the district's maximum amount of debt on the effective date of this Act, whichever is greater.

The effects of this bill on local schools will be significant! Please share the impact of this limitation on your schools with your lawmaker. The bill:

  • Includes interest (which is not "borrowed money") and alternate revenue bonds in a school district's debt limit, both of which are currently exempted from the debt limit. No other state in the country considers interest to be part of debt. 
  • Includes interest in a school district's debt limit calculation which would automatically push many districts over their debt limit.
  • Severely restricts a school district's ability to restructure debt to respond to current economic climates and provide debt relief to taxpayers at times when tax rates are too high for communities to sustain.

Remind your representative that safeguards are already provided for in Illinois Statute:
  • The annual debt service levied is for referendum bonds, approved by the voters in referendum; andfor non-referendum bonds, limited to the debt service extension base, a fixed annual amount which can only be adjusted by referendum. Therefore the district's debt burden is already limited by law and voter approval 
  • The Illinois State Board of Education (ISBE) currently monitors long-term and short-term debt limitations via the Financial Profile Score reporting 
  • Debt issues are currently limited to a 20-year repayment period unless the district secures a legislative exemption due to extenuating circumstances. In these cases, an additional 5 or 10 years added to the repayment period is still significantly less than the useful life of a new building 
  • PA 100-503 just passed in 2017 and effective January 2018 provides for additional statutory requirements 
Please contact your State Representative and urge a NO VOTE on HB 5572.

HB 4789 (Breen, R-Lombard) would be virtually impossible for school districts to comply with. The bill:
  • Reduces the current 5 percent administrator cap to the lesser of 5 percent or CPI
  • Establishes three separate cost limits and broadens the current definition of "administration" to now include support costs and those for principals, deans, and even teacher leaders 
  • Changes the limit from one based on actual costs of administration to one based on the per pupil costs of administration 
  • Establishes 2018-19 baselines for the two new administrative categories based on 2001 census increased by CPI and the 2015 census increased by CPI, respectively.
 This proposal will hurt smaller districts and those with flat or declining enrollment. Even if those districts are able to reduce administrative expenditures, they will find it difficult, if not impossible, to keep per pupil costs below CPI. Holding districts to 2001 and 2015 cost baselines is simply unfair. It's retroactive punishment without any knowledge or ability to comply.

Please contact your State Representative and urge a NO VOTE on HB 4789.

SB 3418 (Rezin, R-Peru) sets limitations for school districts entering into joint agreements to share the services of a superintendent. The bill also creates a referendum process to attempt to force school districts into joint agreements to share administrative services. 
  • SB 3418 is presented as a cost-saving measure, but it takes away local control and the end result could actually cost school districts more
  • Locally elected school boards already have the power to enter into a joint agreement to share administrative services and costs
  • Unnecessarily forcing administrators to spread their duties across multiple school districts will likely result in requiring additional compensation, or the hiring of additional administrative staff
  • With legislation pending to limit school administrative costs (HB 4789), this measure could place school districts in the dangerous position of being required to share administrative services, but limited in their ability to adequately compensate staff for additional duties.
Please contact your State Senator and urge a NO VOTE on SB 3418.

Consider using these links to register your positions. Be sure to make your response reflect facts about your school district. Click on the link, enter your zip code or address and follow the prompts. Our Illinois Principals Association partner provided these links for our use.