Frequently Asked Questions About the Hall High School Financial Crisis
by Mike Struna
March 29, 2010
Hall High School District 502
Financial Facts and Information
Answers to Frequently Asked Questions
A) What are the causes of the current financial crisis at Hall High School?
There are many causes that have led to the current financial crisis at Hall High School. A sort of “perfect storm” has hit Hall High School which has led to expenditure cuts for the 2010-2011 school year. Among those causes, there are five that have had a major impact on Hall
1) Declining state revenues. The state of Illinois has, over many years, built up a 11 billion dollar deficit. In order to address that deficit, school funding in 2010-2011 will be cut by 10 to 17%. General State Aid, the second highest revenue source for Hall High School, will decline by approximately $200,000 in 2010-2011. During the 2009-2010 school year, General State Aid to Hall High School did not increase. (click here to see a history of our GSA funding) In addition to a decline in GSA, the state has also failed to fully fund Categorical Grants that reimburse schools for transportation and special education costs. For the current year, Hall High School has lost $98,412 in categorical funding that was due in December, and could lose an additional $171,511 due in March and June.
2) Declining enrollment at Hall High School. General State Aid is, in part, based on student enrollment ($6,119 per student) During the past five years, enrollment has declined at Hall which led to no increase in GSA for 2009-2010 and will add to the decline in GSA for 2010-2011. Enrollment at Hall High School is not projected to increase during the next five years.
3) Slow growth in local property tax revenues. The local property taxpayer is the highest source of revenue for Hall High School. The local taxpayer contributes close to 60% of our revenues. Due to a declining economy, the percent of local property tax growth in the last seven years has been 2% as compared to a 5% growth during the years 1997-2002. Consequently, the most important revenue source for Hall High School has seen a declining trend. (click here to see history of local property tax base)
4) Declining Corporate Personal Property Replacement Tax Revenues. Another important revenue source for Hall High School is Corporate Personal Property Replacement Tax. CPPRT is based on the state economy and is collected by the state and disbursed to local governing bodies. For the 2009-2010 school year, Hall High School saw a $15,000 decline in CPPRT and the state is predicting a 15% decline for the 2010-2011 school year.
5) Increases in health care costs. Health care costs continue to rise annually. For the current 2010 year, the increase reached 14%. The Hall Board of Education is currently spending one-half million dollars annually for employee health care and that cost will most likely increase in January of 2011.
B) Can the District temporarily increase revenues by borrowing money?
Yes, the District can borrow money to fill the current gap between rising
expenditures and declining revenues. The District is currently repaying over
4 million dollars in previous bonds. Those bonds will be repaid by the year
2017. The District has a debt limit of 8 million dollars and therefore could
borrow additional funds to balance the budget. Additional borrowing
would extend our debt until 2019 increasing the property tax rate for the
residents of Spring Valley, Ladd, Dalzell, Cherry and Bureau.
The Board of Education is opposed to further borrowing at this time.
C) Is Hall High School levying taxes to the maximum rate in the Education Fund? Yes, by law a high school district (such as Hall High School) can levy .92 in the Education Fund. Hall High School is currently levying 1.61 in the Education Fund due to an increase that was approved in the past.
D) Can the District raise the tax rate in the Education Fund to generate new revenues? Yes, the District can raise the tax rate in the Education Fund but only by passing a referendum. In light of the current economy, and the current high tax rates of the citizens of Spring Valley, Ladd, Dalzell, Cherry and Bureau, the Board of Education is not in favor of submitting a tax increase referendum to the ballot. (click here to see area community school tax rates)
E) Compared to other area high schools, how much does Hall spend per student? During the years 2003-2008, Hall High School spent $10,671 per student which was higher than Princeton H.S., LPHS, Mendota H.S., Ottawa H.S., and Streator H.S. (click here to see expenditures per student)
