State Board of Education Chairman Ronald J. Gidwitz and State Superintendent of Education Robert E. Schiller today announced that the State Board has approved an emergency grant for Hazel Crest School District 152 ½ that will enable the district to fund short-term payroll expenses while the district’s Financial Oversight Panel completes a financial analysis and makes recommendations for achieving a long-term solution.

“This $283,000 emergency grant is the maximum we can give the district without specific legislative action,” Schiller said. “Yet it will only get the district through payrolls that are due in November. The district will still run out of money before the end of the month.

“We are anxiously awaiting further analyses from the Financial Oversight Panel and recommendations for achieving a long-term financial solution that can be considered by the General Assembly during the veto session later this month. We must act quickly to assure the continuation of educational programs for the district’s 1,132 students.”

State law authorizes the State Superintendent of Education to issue a grant to a district with a Financial Oversight Panel of $250 per student if the Panel finds the grant is needed and makes the request. The Panel is also requesting an emergency loan of $1,132,000 that is also authorized by state statute. The current state appropriation for these purposes is insufficient to make the loan, so the request will be submitted for legislative approval. Since the district has reached its legal debt limit, the legislature would also need to pass legislation excluding this loan from statutory debt calculations.

“This district may be the tip of the iceberg,” Gidwitz said. ”Numerous schools districts are facing severe financial problems, but in the case of Hazel Crest, there appears to be no way to fund programs for more than a few more weeks without legislative action.”

Schiller also said that his office is working with the state Comptroller’s office to ease the district’s immediate cash-flow problems by accelerating the district’s regular payments from the state.

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November 4, 2002

Mr. Lawrence Hupe
Chairperson
Financial Oversight Panel for Hazel
Crest School District # 152.5
c/o Robert Grossi, Financial Administrator
21189 Lisa Lane
Steger, IL 60475

Dear Mr. Hupe:

This letter is in response to the Financial Oversight Panel’s request (October 31, 2002, letter attached) for a state grant of $283,000 ($250 per enrolled student), a state loan of $1,132,000 ($1,000 per enrolled student), and a special amendment to state law to exclude the state loan as debt from all statutory calculations.

I understand the severe financial difficulties the Hazel Crest district faces; and I am pleased to be able to make the $283,000 state grant available immediately because the Governor and General Assembly had the foresight to provide the State Board with a small appropriation for such emergencies. The State Board has already accelerated some payments to the school district to help it meet payroll, and your data indicate that this grant should help cover payroll through November 22.

The current state appropriation for these purposes, however, is insufficient to make the loan. Moreover, because the Hazel Crest district is currently above its legal debt limit, I could not make the loan even if I had a sufficient appropriation. The General Assembly will have to pass both substantive legislation to exclude this loan from all statutory debt calculations, as well as a supplemental appropriation or transfer bill to provide the funding for the loan.

The State Board will continue to work with the Financial Oversight Panel and the Hazel Crest district to help the district remain solvent and educate its 1,132 students.

Sincerely,

Robert E. Schiller
State Superintendent of Education

Attachment

cc: Dr. Harry Reynolds, Superintendent
     Mr. Michael McMurray, Board President