Balancing the Books

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Stateline students are gearing up for the summer, but it's been a tough year for area school districts as they battle serious budget troubles. Districts from Rockford to Harlem to Oregon have laid off hundreds of teachers and slashed programs.

Local school districts could learn a lesson or two from Hazelcrest, Illinois, one of a handful of school districts to lose financial authority to the state.

Hazelcrest, Illinois is a small town that sits on the southern edge of Chicago. It’s a town that has more school buildings than gas stations.

But Hazelcrest Schools almost went out of business last fall.

"We were in a hole and it became very apparent that we weren't going to make it through the year," said Dr. Harry Reynolds, superintendent Hazelcrest Schools.

Hazelcrest was nearly seven million dollars in the hole, a lot of money for a district of only 1,200 students. And this was after laying off teachers, slashing programs, closing facilities and sending up classes in trailers and desks in hallways to make extra space.

The district was so far in the red that it could borrow no more money or pay vendors and staff

"You reach a point where you start cutting and you can no longer sustain what you're suppose to be doing and I think the most honest thing to do is say that," Reynolds said.

Two successful referenda weren't enough to save the district from financial collapse, so Hazelcrest Superintendent Harry Reynolds turned to state lawmakers for help. Legislators came through with six million dollars in loans and grants with one stipulation; a state appointed authority would take over the district's financial matters indefinitely.

"They're bottom line folks. They want to know whether you have the money or don't have the money and what you're going to do about it," said Reynolds.

Reynolds says Hazelcrests's budget crisis was a wakeup call for the state.

"The state quickly discovered we weren't the only one in trouble. There were a lot of other districts that were pretty much in the same position," said the superintendent.

District 205 in Rockford is one of those districts, struggling to operate with a nearly $20 million deficit and zero borrowing power. Figures that earned the district a spot on the state's financial watch list.

"In a word, dismal. It can't get much worse," said Jay Nellis, Rockford School Board.

Jay Nellis is an accountant by trade and the vice president of the Rockford School Board.

"When you look at the amount of money we're spending and the year after year of deficits, it's obvious were out of control," Nellis said.

Nellis says if school board members and administrators don't get serious about cutting costs, the state isn't afraid to do it for them.

"They're not going to be sensitive to the needs and desires of the community. They're only going be looking at what we can do to save money," said Nellis.

In the school finances debate, there's been a lot of finger pointing. Some blame the education funding formula based on property taxes. Others blame a state government that they say puts prisoners before students. But one state lawmaker says school districts bare most of the blame for not balancing their bankbooks.

"We're not going to bail them out. They have to solve their own problems and shouldn't spend more money than they have," said Dave Syverson, Illinois State Rep.

"I think the mindset of a lot of people involved in education in Illinois is not about the children. Our politics may be more important than our children," said Reynolds.

And the future of Hazelcrest Schools? Reynolds says they've cut all the teachers and programs they can, closed down buildings and facilities and it's still not enough. Hazelcrest has enough money to make it through one more year, and then it will likely be merged or absorbed into another district.