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Why can't the district borrow money to avoid cuts?
Education finance is regulated by a complex set of state laws. One state law regulates school districts' debt ceiling; District 57's debt ceiling is $52.8 million. However, the Property Tax Extension Limitation Law (PTELL), or the "tax cap law," supersedes that law, restricting the amount District 57 can borrow without going to referendum to approximately $16.5 million. Over the course of many years, the District has borrowed the maximum allowed under PTELL and cannot borrow any more until the debt is repaid. The money that was borrowed was spent on capital improvements; one example is the wide array of life safety improvements across the District buildings that we were required by the state to make last summer.
Additionally, borrowing to pay daily operating expenses would be like a homeowner taking out a home equity loan to pay for groceries. It is not sustainable. The District currently has a structural imbalance in its budget. For many years, the District has been able to provide the level of service our community expects (low class sizes, a wide array of programs) only by depleting the District's reserves. This cannot be corrected by borrowing. It also cannot continue because the reserves are reaching the minimum needed to meet payroll while waiting for Cook County to mail the tax bills. The District must reduce expenditures to match the revenue the district receives from the local community, state and federal sources.