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FACT SHEET – The Financial Crisis at Hazel Crest School District 152˝
The correct, actual factors leading to bankruptcy – compiled from District audits, School Report Cards, Cook County Clerk’s Office Data, and Illinois State Board of Education Annual Financial Report Forms
Compiled for Legislators by SCOPE – Charles J. Thier, Legislative Director, (708) 424-3715
Compiled for SCOPE by Ed Wahl
- The District covers 3.4 square miles, and is divided north-south by the Tri-State Tollway (I-80/294) and east-west by the Canadian National-Illinois Central Railroad.
- The railroad covers 19.1% of the District’s area, but pays only 3.5% of the District’s taxes.
- The tollway covers 11.8% of the District’s area, but pays NO taxes.
- The District is “landlocked” with little open land remaining for tax base development.
- Many commercial properties are vacant, depressing the EAV until new business can be attracted by the villages.
- District enrollment has never dropped below 1991 levels when the PTELL first was effective, with approximately 1,100 K-8 students today.
- The percentage of students from low income families has increased by 70% since the 1990-91 school year.
- For each of the last five years, the percentage of students from low income families has been double the state average, requiring above-average expenditures to serve the low-income student population.
- Student mobility rates have been 40-60% above the state average rate since 1991.
- For only three of the last 14 budget years has the State appropriated 100% of all categorical grants and reimbursements, leaving the District to make up the shortfalls in the other 11 years.
- From available audit records, the District’s costs to comply with the special education mandate exceeded all sources of special education revenue by $500,000 for each year since 1995-96, forcing the District to spend away its cash balances, cut expenses and programs, and take out loans to pay this bill.
- · With the PTELL setting the District’s Debt Extension Limitation at $427,000 (the 1994 levy amount), the District lacked the legal means to pay the annual $500,000 special education bill it was required to pay. This factor alone so eroded the District’s finances and added debt over the years that the ability to borrow money was exhausted.
- Because of property tax assessment appeals, PTAB, the Cook County Board of Review, and the courts have lowered the District’s EAV to below the level of the 1996 triennial reassessment.
- Tax caps have cost the District almost $700,000 in local tax revenue since 1991.
- The Cook County Treasurer withheld $450,000 in tax collections from 1997-1999, extending them finally in 2000-01.
- Starting in 2000, the Cook County Treasurer has taken over $400,000 in current tax collections to pay PTAB, BOR, and court awarded refunds, including almost $100,000 since July 1, 2002.
- The District’s EAV per student is only 46.7% of the state average elementary district, and its total tax rate is slightly above the state average. This means that Hazel Crest has only one-half the local tax revenue per student available to the average elementary school district.
- Because of the PTELL, the District could not collect its full Education Fund tax rate in 1993, 1996, 1997, and 1999.
- The District’s operating cost per student has ranged from 75-85% of the state average cost for each year since 1989, reflecting its limited revenue situation.
- Despite its small size, the District has two TIF Districts, with frozen EAV until 2024. In 2000, $210,500 in taxes was lost by the District into the TIF account. Only small “surpluses” have ever been returned.
- The District must comply with and pay for many unfunded and underfunded federal and state mandates, most of which do nothing to educate children.
- Paying the bills with debt is no longer possible; the money has completely run out.
- The District has suffered from high turnover rates in board members, superintendents, finance officers, and staff. Inexperience of board members, interim administrators, and a lack of continuity in leadership all contributed to a failure to recognize and fully address the emerging financial problems.
- Recognizing the financial emergency, the new superintendent and finance officer acted immediately to identify the needs and seek assistance from the taxpayers and state.
- Taxpayers agreed to increase their taxes to the maximum legal rate set by Illinois law by passing two referendum questions on Nov.5.
- It will cost the state less to help the District survive than it will cost to involuntarily dissolve the District and annex it to another district.
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