How We Got Here

Details on what got us to this point

Our Evanston schools are such a special place and have been a magnet for families who treasure our diversity, our inclusiveness and our ability to prepare our children to thrive today, in high school and beyond.  

Over the last ten years, we've welcomed nearly 1,500 new students into our classrooms, which is a wonderful endorsement of everything our schools offer.  It costs $20 million annually to educate these nearly 1,500 children, but only $3.5 million has been added to the property tax rolls each year leading to a massive budget deficit.  Property taxes pay for 75% of our education budget, and there are strict property tax caps that limit how much more money goes into our schools regardless of how much our home values increase.  

- Illinois ranks dead last nationally in state funding for public education.  
- Over the next 8 years, we have a more than $112 million budget hole.
- Nearly $11 million has already been cut from our budget over the last several years.  And our teachers' are helping us save an additional $2.6 million over the next three years, But we can't cut our way out of this structural problem without making crippling and permanent damages to our most precious resource.
- We have nowhere else to turn.  The state will never fill the gap and federal funding has gotten even worse under the current administration
- Asking our property owners to pay more wasn't a rash or easy decision, but the consequences would be incredibly dire if we don't: Class sizes would explode, schools could close, kids forced into other schools and multi-grade classrooms, no full day kindergarten, curriculum and enrichment programming slashed and teachers laid off.    
- If these drastic cuts are enacted, property values will be impacted as seen by our neighbors in Highland Park
- The average homeowner would pay $1.25 more per day.



In an effort to be as transparent as possible and help our community better understand the district's financial situation and what a referendum actually means, the following list of frequently asked questions has been compiled.

Basic Budget Questions

How much is the District 65 budget?

In FY17, the annual budget totals $125 million and supports instructional and operational goals. For the past 15 years, the district has submitted a balanced operating budget.

Doesn’t the state give the district funding per pupil enrolled?

Yes. District 65 receives General State Aid (GSA) payments from the State of Illinois. District 65 spends $14,150 annually per student; however, GSA funding only provides approximately $600 per student. In addition, GSA payments have been reduced or pro-rated from 89-92% by the state for the last several years. GSA makes up around 4% of District 65 revenue.

How has student enrollment impacted the district's budget?

District 65 has faced significant growth in enrollment over the last ten years. Since the 2006-2007 school year, enrollment has increased by 22% (1,420 additional students). As a result, the budget has grown to support the increased staffing and expanded programming required to ensure the needs of all students are being met.

How did we get into this financial crisis?

District 65 has faced a structural deficit for many years, which means the costs have consistently been higher and grown faster than revenue. Over the past seven years, the district has made $10.8 million in reductions to balance its budget. Future deficits are projected to be very large and the district will no longer be able to balance its budget without taking further action. As a result, there are two options for moving forward - making continued painful reductions (approximately $8.8 million over the next two years alone) or increasing revenue through an operating referendum.

What are the current financial projections?

The district is currently projecting annual deficits starting at $5.1 million in the 2017-2018 school year and increasing to $24.4 million in the 2024-2025 school year. Through 2025, the cumulative total amount of these deficits is $112.3 million. Click here to view detailed financial projections.

I keep hearing about a structural deficit? What does that mean?

A structural deficit occurs when expenses grow faster than revenue. The district’s revenue growth is limited by state and federal formulas and regulations. Due to a slow economy, the district has experienced several years of lower-than-projected revenue growth (+1.9% per year). Yet, expenses continue to grow at a faster pace (+3.9% per year). Until revenues and expenses are even and grow at the same pace, a structural deficit will continue to exist.

WHY CAN’T THE DISTRICT USE MONEY FROM ITS FUND BALANCE (SAVINGS ACCOUNT) TO ADDRESS THE DEFICIT?

It's not recommended to use the fund balance to fund ongoing operations, especially when the fund balance is already low. Also, fund balances in certain funds can be restricted. Further decreases can impact the district’s bond rating (making it harder to get loans) and increase borrowing costs. The fund balance may also be considered a “rainy day” fund in the event of unforeseen maintenance or instruction costs (e.g., roof damage from a storm). Additionally, the fund balance is used to pay bills until property taxes are received.

Are the deficits caused by high administrative spending?

Administrative expenses account for 4% of the overall District 65 budget. Historically, between 64%-77% of Illinois districts have spent more per pupil on administration than District 65. Over the past seven years, the district has funded increases in instructional spending by making reductions in other areas, including administration. From 2010-2017, instructional spending has increased from 43% to 52% of the overall budget, while administrative spending has decreased from 5% to 4%.

I hear that the district pays a lot on consultants. Is that true?

In FY16, the District spent $366,669 on consultants which is less than half of one percent (0.3%) of the operating budget. This amount does not include consultants who are fully funded by state and federal grants. The largest portion of consultant spending is on activities that support teachers, principals, and students. This includes support for instructional leadership teams, school climate teams, work to further promote equity in our schools, and clinical consultations for students with special needs. in.

Understanding What an Operating Referendum Means

What is a referendum?

An operating referendum increases property tax revenues in order to support educational expenses including instruction, student support services, and other operations.

When was the last time the community approved an operating referendum that supported District 65?

The last time District 65 voters approved an operating referendum was over 30 years ago in March 1986.

What does the proposed $14.5 million referendum cover?

Without a successful referendum, the district will be forced to make significant cuts - $8.8 million in reductions over the next two years alone. The proposed referendum would eliminate the need for these reductions and would also cover necessary capital improvements across the district including completion of double vestibule entries at five remaining schools (King Arts, Rhodes, Lincolnwood, Orrington, and Washington); restoration of one reading specialist to support each elementary school; and the opportunity to maintain and expand the 1:1 technology program in middle schools.

Referendum funds would also support the District’s long-term financial stability by funding technology with operating funds rather than long-term debt, and maintaining our fund balance, which would otherwise fall to a level that would jeopardize the District’s ability to borrow money and pay its bills.

What is the impact of a $14.5 million referendum on taxpayers?

The proposed referendum would cost a homeowner paying the average amount of property tax in Evanston ($8,076 in 2016) an estimated additional $470 per year or $39 per month above the tax cap limit. Click here to view estimated financial impact.

How did the District determine the amount of the referendum?

For nearly two years, the school board and administration have thoughtfully discussed the district’s financial situation and options for addressing the significant deficits. The decision to seek an operating referendum in 2017 was not one that was taken lightly. This amount will both address the current projected deficits at least through 2025 and further support students and schools. The timeframe used for projections was determined based on the advice of financial advisors and the desire to project as far out as possible while still taking into account the level of financial uncertainty before the district.

How would a referendum support education in District 65?

A referendum would ensure investments necessary to maintain and expand our work to promote equitable outcomes for all students. This includes:

  • Small average class sizes
  • Strengthening core curriculum and culturally relevant instruction across subjects
  • Focus on early literacy
  • Intensive supports for striving students
  • Social emotional learning and school climate
  • Expanding family supports and community partnerships
  • Technology for students and staff

If the referendum is successful, when will the district receive the funds?

If an operating referendum passes, the district would receive funds during the 2017-2018 school year.

What happens if the referendum does not pass?

Without an increase in funding, the District will have to make $5.1 million in budget reductions to balance the 2017-2018 operating budget, followed by at least $3.7 million of reductions to balance the 2018-2019 budget, with significant reductions in subsequent years.

If a referendum does not pass, what would potential reductions look like?

To make $8.8 million of reductions in the first two years, the following would need to occur:

  • Increase middle school class sizes up to 28
  • Increase elementary class sizes ranging from 23-29 students (closer to the current elementary class size guidelines)
  • Deep cuts to central services and operations
  • Reduce building level and classroom supports
  • Make reductions to curriculum and enrichment programming

Potential reductions to eliminate the deficits would include the termination of approximately 50-60 full-time staff members across all position categories. This leaves between $2.8 million and $4.6 million of cuts still needed, which could include:

  • Further increases to elementary school and/or middle school class size maximums
  • District-wide home school reassignment
  • Closing a school/schools
  • Combining buildings to serve fewer grade levels
  • Multi-grade classrooms
  • Eliminate full-day kindergarten program (D65 would consider providing a fee-based full day program)
  • Does the referendum take into account the state-level budget threats?

    The projected referendum includes an assumption that some expenses for teacher pensions will be shifted to the local school districts based on recently proposed legislation. Neither property tax freezes nor a state redistribution of funding are not included in our financial projections. The financial projections include tax increases from the CPI (based on the tax cap formula). The latest version of a possible property tax freeze is proposed for two years and would decrease property taxes by the CPI in those years. Implementation of a funding formula change would also negatively impact revenue up to $6 million per year. Given the uncertainties related to any of these changes, the Board considered including the pension cost shift as the most likely scenario.

Instruction as Top Priority: Historical Budget Reductions

Has the district made reductions to address the impending financial challenges?

The District has been facing deficits for years and has balanced the budget by making cuts as far from the classroom as possible. Over the past seven years, the District has made $10.8 million in reductions in order to maintain a balanced operating budget. As a result, there are limited options for additional budget cuts going forward.

What have budget reductions in District 65 looked like over the past seven years?

In order to maintain a balanced budget, the district has been forced to make painful reductions as follows:
Non-instructional budget reductions have included reductions to purchased services, primarily facilities maintenance, custodial and maintenance supplies, central office administration, support staff, building and non-instructional administration, and capital projects.

Instructional budget reductions included reductions to staff (15 teaching positions and 2 clinician positions), special services reductions, reading specialists, substitute teachers, instructional supplies, in-service and savings from teacher retirement incentives.

HAS THE DISTRICT EXPLORED ALL OPTIONS TO ADDRESS THE DEFICIT? WHAT OPTIONS ARE LEFT ON THE TABLE?

In a concerted effort to reduce pending deficits, the District has made nearly $11 million of both non-personnel and personnel budget reductions over the past seven years. District administrators will continue to use a zero-based budgeting strategy (building a budget from $0) to continue to reduce costs and identify efficiencies wherever possible. The district will continue to apply for state and federal grants and partner with community service organizations to provide support for students and families. The district continues to advocate for adequate state funding and for tax cap increases.

Benchmarking/Comparisons

How does D65 spending compare to other districts?

District 65 spends $14,150 annually per student. A recent benchmarking analysis shows that per pupil spending in District 65 ranks in the middle of similar peer districts. In Illinois, the average per pupil spending is $12,821. According to the analysis, spending for similar districts is as follows: Wheeling District 21 = $16,571; Skokie District 68 = $15,358; Wilmette District 39 = $14,804; Oak Park District 97 = $13,924; Arlington Heights CCSD 59 = $13,898; and Palatine CCSD 15 = $12,536. While it is not considered a similar peer district, Evanston Township High School District spends $21,939 per student.

Are other districts facing financial challenges?

  • In FY16, 60% of districts in the state experienced budget deficits.
  • Oak Park Elementary District 97 is also going for an operating referendum - after passing one as recently as 2011. .
  • In the past seven years, 21 districts from Cook County and adjacent counties went for operating referenda. A total of eight of these districts passed successful referenda. Examples of districts that sought an operating referendum include: Golf District 67, West Northfield District 31, Millburn District 24, Berwyn South District 100, Westchester District 92-5, Wilmette District 39, Oak Park District 97, Prospect Heights District 23, and Riverside-Brookfield District 208..

HOW DOES THE DISTRICT’S FUND BALANCE COMPARE TO OTHER DISTRICTS IN ILLINOIS?

District 65 has a low fund balance at less than 20% of operating budget expenditures. This puts the district in the bottom 15% in the state with 724 Illinois school districts rated higher by the Illinois State Board of Education for fund balance to revenue ratio.

Understanding the Ballot Question

What is the actual question that will be on the ballot?

On April 4, 2017, the Evanston/Skokie community will be asked to decide on the following question:

Shall the limiting rate under the Property Tax Extension Limitation Law for Evanston/Skokie Community Consolidated School District Number 65, Cook County, Illinois be increased by an additional amount equal to 0.595% above the limiting rate for school purposes for levy year 2015 and be equal to 4.166% of the equalized assessed value of the taxable property therein for levy year 2016?

Yes = voting FOR the referendum
No = voting AGAINST the referendum

Are other districts facing financial challenges?

Can you explain the different components of the ballot question?

A successful referendum will provide a higher limiting rate in order to capture the additional $14.5 million of property taxes above the tax cap limit. Essentially, the question on the election ballot asks for authorization to increase property taxes for school purposes.

Property Tax Questions

HOW MUCH REVENUE IS GENERATED FROM PROPERTY TAX? WHAT ARE THE DISTRICT’S OTHER SOURCES OF REVENUE?

Property taxes account for 75% of the district's budget and are paid by residents from Evanston and a small portion of Skokie who live within District 65 boundaries. Other local revenues such as student fees, lunch sales revenue, permit revenue, and interest income account for 4% of total revenues.

The remainder of revenues come from state and federal funding sources such as General State Aid and state and federal grants (19%). Corporate Personal Property Replacement Tax (CPPRT), which is state income tax paid by Illinois businesses, accounts for 2% of total revenues.

How much does the district collect in property taxes each year?

The amount that district revenues increase from property taxes collected each year is limited to CPI or 5%, whichever is less (historically low - less than 1%).

Individual tax bills may still increase by more than CPI or 5%; however, it does not change the amount that the district is able to collect.

My property tax bill just went up substantially. Does District 65 receive any of this additional revenue? If not, where is it going?

Revenues that the district receives from property taxes are limited by law by the tax cap. This amount is limited to the increase in the Consumer Price Index (CPI) which has been historically low (less than 1%) and the amount gained from new property built within D65 boundaries.

Other taxing bodies that make up part of a homeowner’s property tax bill may not be limited by tax caps. Individual property tax bills can increase above the tax cap limit if those home values increase more than other properties, due to reassessments, home additions or renovations, or indirectly, if other property values were reduced through successful tax appeals. Simply put, if all home values go up the tax rate will go down such that the total increase from the property tax levy that the district receives never goes higher than the previous year levy, plus CPI, plus new property added.

Referendum funds would also support the District’s long-term financial stability by funding technology with operating funds rather than long-term debt, and maintaining our fund balance, which would otherwise fall to a level that would jeopardize the District’s ability to borrow money and pay its bills.

There is so much property development happening in Evanston. Isn't District 65 seeing revenues from those new properties?

Yes, District 65 receives property taxes from new property. However, if a property is under a Tax Increment Financing (TIF) program, property taxes from that new property are not received until the TIF expires and the new property joins the tax rolls. Additionally, over the last ten years, the district has received $350K per year on average in taxes for new property. This compares to the roughly $20 million in increased expenses to serve the surge in enrollment over the same period.