A future deficit for Evanston/Skokie School District 65 by the 2005-06 school year could affect the fate of a potential Fifth Ward school.
School board members will vote at the Nov. 18 board meeting on whether to approve a new school in the Fifth Ward, which has lacked one for more than 30 years.
According to the current proposal, a kindergarten through third-grade school would be built at the former Foster School building, now owned by Family Focus. But no official plans have been negotiated with Family Focus.
With a Fifth Ward school, the district’s projected debt is about $8 million. But even without the school, the deficit would only be delayed — by 2005, there would be a debt of $5 million. The estimates include state construction grants that the district will receive.
Last spring, the school board cut $3.7 million in programs from the 2002-03 budget.
“We (made cuts) in hopes we would be in a balanced position in about two years,” said Greg Klaiber, a school board member who is also on the district’s financial committee. “The latest projection is that we will not be.”
The board has limited options in solving the budget problem, said Betsy Sagan, a school board member.
Property taxes are the primary source of the district’s revenue, Klaiber said. But taxes cannot be changed by the board since the tax rate is tied to the cost of living.
“It’s a double-edged sword,” he said. “With an increase in inflation, there’s an increase in revenue. But increasing inflation doesn’t make people happy.”
There is a tax cap set by the federal reserve that allows the district to obtain only $1.6 million a year in nonreferendum debt payments. The cap is something the district also cannot change, Klaiber said.
But further down the road, changes could be underway. In the 2008-09 school year, the district’s downtown tax increment finance (TIF) district will expire, bringing an additional $2 to $3 million a year in revenue, according to Klaiber.
“That’s good news on the horizon,” Klaiber said. “But what do we do in the meantime?”
The administration suggested the district borrow $7 million, the maximum amount it can borrow with the cash reserves it has. The district would not have to repay this money until 2012.
Klaiber said the board must decide if this is a prudent action, since the district would be borrowing money from a one-time source.
Another possibility is calling for a district referendum, said Klaiber. The board would propose an increase in the education tax rate and ask taxpayers to pay for the programs that would be cut.
The financial committee will meet this morning to discuss these possible solutions, Klaiber said.
With the debt in mind, the Fifth Ward school will be an important issue, board members said.
“I think it will have a bearing on whether we can do the school now or later, or how it should be funded,” Sagan said.
Even with budget concerns, some community members said they still want a school.
“I don’t want the school board to put a lot of money into it,” said Harris Hudson, a member of Foster Park Neighbors, a community group that has actively supported a Fifth Ward school. “I want it to be workable, not awkward.”
While Hudson said he sympathized with the school board for the deficit problems, he said a school will be built in the community.
“Whatever it takes, we should be willing to do it,” Hudson said.
