Evanston/Skokie School District 65 wrapped up the 2024 fiscal year with a $10 million budget deficit, topping the previous year’s $7 million debt.
The D65 School Board received an update on the issue at the Aug. 5 meeting. A message to the D65 community sent from Superintendent Angel Turner a week before the meeting stated some bills for the previous fiscal year added to the deficit with the majority of expenditures falling on the transportation and special education budgets.
The district has been working to tackle the debt, hiring Tamara Mitchell as the new chief financial officer over the summer and bringing financial consultant Robert Grossi on board.
Grossi presented the budget findings to the board, explaining that on top of the deficit, district revenues came in $514,000 under what was expected. He pointed to timing issues with state and federal grants, saying otherwise the revenue budget was primarily in line. Mitchell said 75% of the district’s budget comes from real estate taxes with the final 25% comprised of various state and federal grants, evidence-based funding and other local funding.
Revenue is expected to drop for the 2025 fiscal year, per Mitchell, as one-time grants for technology purchases and to combat COVID-19 are sunsetting. Corporate personal property taxes, which are collected by the state from corporations to help fund schools, are expected to drop by about 10% as well, per the Illinois Department of Revenue. Mitchell expects this to result in $460,000 less coming to the district.
“A portion of these variances was a conscious decision to accelerate and become current with our bills, to pay the bills in the fiscal year in which they were due,” Grossi said. “There were about $2.5 million at least in the special education and transportation categories that were due prior to the fiscal year. So we caught up with those payments and are mostly current on fiscal year ’24 payments due.”
Even removing past payments due, the budget still remained over what was projected.
Historically, the district remained above board until the 2023 fiscal year when increased transportation costs caused woes across the country owing to the fallout from the COVID-19 pandemic. According to Grossi, transportation costs have doubled since 2022 from about $5.4 million to $10.9 million. Special education costs have also doubled since 2015, ballooning from approximately $15 million to $30 million in 2024.
The district is also faced with the task of maintaining its 18 school buildings, some of which require major renovations. This issue was in part what pushed the board to vote to close the Dr. Bessie Rhodes School of Global Studies after the 2025-2026 school year. With enrollment in the district trending down, Grossi said this could be an opportunity for the district to save funding by cutting the number of buildings it operates to better match with its student population.
“We don’t want it and there’s going to be tough decisions,” he said. “We want to maximize student learning in the most cost-effective manner … we don’t want to put money on the roof of a school we may close in two to three years.”
The district has also begun to hand over the responsibility of student athletics to the Evanston Parks and Recreation Department beginning this year with the third through fifth grade programs. Next year will see the middle school programs transfer over.
There is light at the end of the tunnel, he said, with indications that transportation costs are on the downswing.
Beyond the increased transportation and special education budget needs, the district was also over budget on salaries and employee benefits.
The district has embarked on a deficit reduction plan for the 2025 fiscal year which is projected to generate $6.5 million in savings. The first phase of this plan calls for a majority of reductions in the salary and benefits category.
To accomplish this, the district would shed 21 teachers, 10 administration positions and nine central office personnel. Grossi said all but one of the teacher positions were cut due to retirements and contract non-renewals.
As part of the deficit reduction plan, the district is placing a hiring freeze on all non-essential vacancies and immediately closing all open, non-essential positions that have yet to be filled. Discretionary budget item lines are also to be frozen. An in-depth budget analysis to reduce expenditures while not impacting students is part of the long term plan.
Board member Joseph Hailpern said he wished to have heard more of this information ahead of time so he as chair of the board finance committee could have pushed for further savings reductions.
Grossi stated that by the time he was brought on, the goal was to catch up on bills, which has been accomplished. He also stated that the 2025 budget was already in place and once it’s been approved, not much can be done to alter it.
“The district did not overspend relative to the budget. I just don’t think it was a great budget,” Grossi said. “This year we’re going into the fiscal year with real reductions. $6.5 million is a significant amount and it was built off the prior year.”
He continued saying the plan for 2025 is to make the maximum impact to lowering the deficit without impacting student learning.
Another board member, Elisabeth “Biz” Lindsay-Ryan, expressed frustration that the district seemingly hasn’t made the progress it hoped to when bringing Grossi on.
“Now we’re having the same problem that we thought we were eliminating by having all of these audits to fix these systems,” she said. “It is baffling to me that we are finding (ourselves) another $10 million off.”
Grossi pointed to the increased cost of Foster School, the new 5th Ward school planned to be built and opened for the 2026-2027 school year.
Hailpern also expressed concern that costs won’t come down, saying he isn’t sure at this point if there is a way to not impact students.
“If we want to fulfill hopes and dreams I think were going to have to go a bit lower before we build back up,” he said. “I don’t know how to trust the process now.”
Board Member Mya Wilkins called the situation dire, saying an unbalanced budget will lead to issues elsewhere that will prevent the district from serving students well. Board Member Soo La Kim echoed Hailpern’s concerns about growing costs.
Grossi agreed more needs to be done and said the budget to be presented in September will be the first step. He has experience working to stabilize two of the three school districts that were taken over by the state, one of which he said took a decade to balance itself out.
“There are things we can’t control. We can’t control the pandemic happened and inflation and lots of different things that are going to keep impacting our budget,” Lindsay-Ryan said. “But we need to identify what are the things we can control … I’d like us to really just throw every idea on the table of what are the things we can control, what are the things we can take ownerships of.”
Turner said any expectation that she would be able to fix the district’s budgeting woes when she came on initially as interim superintendent were unrealistic. She said the problem isn’t just the couple budget line items that are out of whack, but that a full restructuring is needed at the district as a whole. Even board priorities should be reassessed, she said, because the reality is that those are unattainable with the current deficit issues.
“I’ve got to make some hard decisions. I’ve got to lead this district the way it needs to be led and I have to know that I’ve been transparent and I’ll continue to be transparent,” she said.
The new tentative budget for the 2025 fiscal year will be placed on display at the district office starting Friday, Aug. 16 with a public hearing to be held a month later on Sept. 16.