NEWS

For Immediate Release
March 24, 2010

Tough economic times take toll on Illinois School Districts



ISBE using revised data to avoid penalizing districts for late payments from the state

SPRINGFIELD — The Illinois State Board of Education (ISBE) released its annual financial profile of the state’s public schools using revised data that takes into account that the state is behind in payments to school districts. The financial profile shows that 578 districts across the state, or 66.5 percent of all districts, are doing a sound job managing their finances during this current fiscal crisis.

“Local school boards are grappling with decreased revenue and late payments from the state,” said State Superintendent of Education Christopher A. Koch. “For the past two years schools have been insulated through funds from the American Recovery and Reinvestment Act but next year we lose a billion dollars in funding and we will likely see this trend of increased financial stress continue for districts across the state.”

The Financial Profile is based on data from Fiscal Year 2009, which ended June 30, 2009. The data has been revised to eliminate the impact of payment delays for mandated categoricals such as pupil transportation, special education and other expenditures due to the state and national recession. The school code was amended, effective August 2009, to specifically ensure that districts are not designated as being in financial difficulty solely due to delayed state payments.  

The Financial Profile is a “point in time” picture and it is likely that the financial condition of many districts has changed in the nearly nine months since the end of the prior fiscal year. Currently, the state of Illinois has a backlog of bills totaling more than $4 billion, of which $894.2 million are bills owed to schools. The backlog of state bills dates back more than six months. Given the uncertainty of state funding, many school districts have announced layoffs in recent weeks to meet statutory deadlines and better position themselves for financial stability.

ISBE developed the Financial Profile in 2003 to help monitor the finances of school districts and identify which ones are in or moving toward financial difficulty. The 2010 Financial Profile data provided to ISBE showed a 5.5 percent decrease in the number of districts that achieved financial recognition, the highest ranking a district can receive, going from 72 percent of districts last year to 66.5 percent this year. The 2010 Financial Watch list – those districts facing the most severe financial problems – increased from 2.5 percent in 2008 to 3.3 percent in 2010.

For the 2010 Financial Profile of 869 districts, there are:

Results of the Financial Profile:

 

FY 09 Financial Profile Based on FY 08 Revised Data
FY 10 Financial Profile Based on FY 09 Data
FY 10 Financial Profile Based on FY 09 Revised Data
#
%
#
%
#
%
Financial Recognition
626
72.0%
550
63.3%
578
66.5%
Financial Review
165
19.0%
203
23.3%
196
22.6%
Financial Early Warning
57
6.5%
77
8.9%
66
7.6%
Financial Watch
22
2.5%
39
4.5%
29
3.3%
Total
870
100.0%
869
100.0%
869
100.0%

The list is created by using five indicators of financial performance:

The School District Financial Profile was reviewed by the Illinois State Board of Education during its regularly scheduled meeting today.

The 2010 Financial Profile for all districts in Illinois can be found online at: http://www.isbe.net/sfms/P/profile.htm.

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