Low state aid, enrollment and poor housing market affect Lincoln-Way

NEW LENOX – Housing starts were booming a decade ago in the towns Lincoln-Way High School District 210 served. When they looked toward the horizon, all district leaders could see was growth, which meant more students in the classroom – and the concern the two academic buildings being used to educate students wouldn’t be enough to accommodate the expected influx of new pupils.

But that picture changed after the construction of Lincoln-Way North in 2008 and West in 2009, when the economy took a nosedive in 2008. Although the school district weathered the storm, it experienced annual budget deficits between $4.5 million to $7.4 million since 2011, leading to reduction of staff and programs.

After closing the books in 2014 with a roughly $7.4 million deficit, the school district was the following year given the lowest financial rating by state education standards. That prompted Illinois to require the district put together a plan by September to drive itself out the financial crisis – or it will be placed on a financial oversight panel by the state.

Lincoln-Way officials are considering shuttering one of the district’s four academic buildings after mulling over and ultimately discarding the ideas of a tax increase referendum and educational cuts. The situation has upset hundreds of residents and parents, many wanting to protect the school their children attend from closing.

As they work on what that plan will be, school officials outlined several connecting factors for why Lincoln-Way is suffering financial difficulties: a poor economy, lower-than-expected enrollment and declining state funding. The district is still paying the 2006 building bond referendum, but officials said it has no bearing on the district’s daily finances.

Projected growth

Board President Kevin Molloy, who was on the board in 2005 when discussions began about constructing new facilities, said school officials “absolutely, 100 percent” saw the need for two new buildings when the 2006 referendum to build Lincoln-Way North and West and renovate Central and East was pitched.

So did the 60 percent of voters who approved the $225 million referendum.

Will County was one of the fastest-growing counties in the nation at the time of the referendum, he said. Between 2000 and 2005, the county’s population grew by about 19 percent to 608,245.

In 2004, school officials expected the district would see more than 22,200 new housing units built in several years, bringing in an estimated additional 4,400 students.

“There was no indication, when we had that thought process, that we wouldn’t be the top, fastest-growing county,” Molloy said.

And as the numbers for projected growth came in for the district’s communities – which include New Lenox, Frankfort, Manhattan, Mokena and Tinley Park – Lincoln-Way officials also were looking at overcrowding at Central and East.

Growth projections indicated East, which opened in 1977, would reach capacity of 3,750 students in the 2006 school year. Projections for Central, which opened in 1954, would reach the same capacity in the 2007 school year.

One of the strongest advocates for the construction of North and West was former Superintendent Lawrence Wyllie, who served in the position from 1989 to 2013. Attempts to contact Wyllie in the past week were unsuccessful.

In 2003, he was telling the school board to prepare for a possible 2006 referendum and spoke about the potential for new buildings. A committee was formed in 2004 to explore options for creating more facilities and it presented in 2005 a report to the school board that included options for construction of one or two schools. School leaders favored having two schools to accommodate projected growth.

But a recession that crippled the housing market disrupted the expected growth – and it never rebounded. Now student enrollment districtwide stands at more than 7,000 students – about 3,300 fewer than projected.

While many residents were supportive of building two high schools, some wanted a one-school option. Elizabeth Burghard, who moved to Frankfort in 2003, said she was one of those residents. She said at the time, she felt the two-school option was presented as all or nothing and she thought it was rushed.

“Why can’t we build one right now and wait a few years and see where we need to build another one if we need another one?” said Burghard, whose daughter will attend North this fall.

But in 2005, Wyllie said the district needed two schools to accommodate the anticipated enrollment influx. He noted construction costs, due to inflation, would just continue to increase if the district waited.

The district is currently not close to its enrollment capacity. According to 2013-14 state data, Central had an enrollment of 1,918 and East was at 2,182; each school can accommodate 3,750 students. North and West have a capacity for 2,500 students each and enrollment sits at 1,787 and 1,301, respectively.

Even in fiscal 2006, with about 6,600 students, the enrollment expectations were already not matching reality. Enrollment was projected to be slightly higher than that.

“Even before the recession, enrollment did not grow the way we were hoping it would back in 2005,” Board Member Christopher McFadden said during a May 14 meeting.

Poor economy, state funding

The school district’s lack of projected enrollment growth followed the decline in new property and overall assessed property values in the school district after the recession crashed the housing market in 2008.

With property values and enrollment dropping, the school district received less in state funding to close the deficit in the district’s budget and keep more money in its fund balances, or savings.

Since 2011, general state aid to the school district declined from $9 million to $4.8 million, and may decline more in the future, according to PMA Financial Network.

In a May 14 board presentation, Superintendent Scott Tingley said even with these issues, the district accumulated revenue used for budget reserves with the sale of land, interest earned in bonds and other sources to endure difficult times.

But district ended almost each fiscal year since 2011 with deficits ranging between about $5 million and more than $7 million, according to PMA Financial Network. Decreasing fund balances also led to more borrowing.

With school state aid being funded at less than 90 percent and the state suffering its own financial crisis following the recession, Lincoln-Way had yet another drawback in its budget.

Since 2008, the school district has made cuts to staffing and programs, as well as charging more in student fees for certain activities to make up the difference. This includes 50 positions in the past three years; the district has 441 full-time employees.

With weak state support, Molloy and McFadden have publicly directed their anger at state politicians and officials who they say don’t fully support education. School officials are also concerned about the effect of proposed legislation that would freeze property taxes or state funding formula changes.

State Rep. Margo McDermed, R-Mokena, who represents the Lincoln-Way area, said everyone would like to see more state funding for schools but demand for other state services is high. Even with 100 percent funding, Lincoln-Way would still be in trouble because it planned for higher enrollment than it received.

“The blame for the situation at Lincoln-Way does not belong on the state of Illinois in any large respect. We can have a little share of it,” McDermed said.

Molloy is hopeful the school district will come out of their financial crisis fine and become a “model of how you fix it.”

“We are going to come out of this in the two-year period we need. At this point, we will continue to be successful with respect to the budget because we have sharpened that knife,” he said.