D228 Board Member Talks Deficit Spending in District

—from Bremen High School District 228 Board of Education Member David Mensing

In addition to ensuring the well-being, health and safety of their children and providing them with very best that they can afford in terms of housing, food, clothing, security, and medical care, parents want to provide opportunities for their intellectual and social growth as they develop from childhood into adulthood. School districts have a responsibility toward their students which encompasses many of the very same provisions.

Problems arise, however, when parents (and when school districts) cannot afford to provide everything that they feel the children should have for their optimal development. Why? Because they have what just about every family experiences and recognizes, namely, a “cash flow” problem. What they deem to be important, and even essential, for their kids they buy for them, even if they have to “go into the hole” to do it. They engage in some “deficit spending,” that is, they spend what they don’t have; and they try to keep that deficit under control so that they don’t go bankrupt.

Just about everyone engages in “deficit spending,” parents and school districts. Paying on a mortgage, making car payments, taking out student loans for college, and even using credit cards are forms of deficit spending for families. They pay interest for the privilege of using someone else’s money to provide things that they can’t pay for “out-of-pocket.” In this economy deficit spending is a way of life. And if the head of the household gets his or her pay cut, is laid off, or loses some kind of support payment, it’s no longer a choice.

And yet, it comes as “news,” especially in school board elections, when virtual panic and outrage are expressed at the very idea that the local high school district engages in deficit spending in order to provide students with what they need to have: A top-notch education WITH all the “frills” attached, not just the “three R’s” with three textbooks, a desk at which to sit, and a chalkboard at the front of the room. ALL of us want MORE than that for our kids! Don’t we?? Elective courses? AP courses? A band program and art classes? Foreign languages? Technology? Low class sizes? Improvement in student growth? Sports programs that are challenging and yet safe? Activities that are not only “educational” but “fun” as well? Bremen High School District 228 has to borrow money (in the form of bond sales) for the very same reason that parents have to borrow money. That’s not reckless. Sometimes it’s necessary.

Unlike family finances, however, school finances are governed by the LAW. There are rules to control deficit spending, caps on what can be borrowed, limits on bonding power, time-frames for repayment of bonds and interest, deficit plans that must be filed and approved which show how shortfalls are to be relieved either by means of budget cuts or increased revenues. For the past two years Bremen Community High School District 228 has been granted “Recognition” status by the Illinois State Board of Education for its responsible debt management, “the highest category of financial strength” (ISBE) in a school’s financial profile. That is a real “plus” for our district and speaks well for our administration and its wise fiscal policy. Those who claim that our district is fiscally reckless are woefully uninformed; and, when they engage in panic-peddling regarding our debt and debt management, they are misleading the public.

Do the taxpayers eventually have to stand good for the repayment of the district’s indebtedness? Of course, they do, just as they have to stand good for their own family debt. And they do it for the same reason: To provide for their children (and for the other children of the community) what they could never afford on their own — AND what the district could never provide on its own, given its low EAV (equalized assessed valuation or “tax base”), the general state of the economy, and the ever-decreasing level of general state aid provided by the State of Illinois. Nobody wants to engage in deficit spending; but deficit spending is not “the problem” in most school districts. It’s the way the debt is managed. Bremen Community High School District 228, like a family that can’t make it on two or even three paychecks, needs to borrow money. It cannot cut enough courses, programs, teaching staff, administrative personnel, and capital expenses to eliminate its need for deficit spending. BUT it can, and it does, manage its debt both wisely and responsibly. The Illinois State Board of Education recognizes that. We should too.

— David T. Mensing

www.GreatSlatefor228.com