On Enrollment & Revenue

Plummeting district enrollment is mostly not a financial problem, it is a political one

FOIA Gras is a free newsletter run by Tom Hayden (FOIA GRAS LLC) that explores various topics in local Evanston Governance, especially around School District 65 (Evanston/Skokie). I publish and share all my data and reports. Subscribing is free, so please subscribe or share!

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This story has been told by other local news sources, such as Evanston Roundtable, but if you haven’t heard yet, District 65 enrollment is down. Since the school year 2018, the total enrollment has decreased by 23%. District 65 is not alone but is more severe than our neighbors; Chicago Public Schools (CPS) has experienced a decline, but around 3% per year.

District 65 Enrollment Data 2018-2023

Forget about “cohorts” and “survival rates” or the District’s arguments from their demographer’s presentation at the last meeting.¹ Let’s do some more straightforward math: how many K-8 aged children live in District 65, and how many attend the schools?

Census 2021 ACS Estimates

The 10-14 years old bin includes some high school kids, so let’s adjust slightly (-1289) and we get 8,764 potential students +/- about a 600. So if we have 6,116 students enrolled right now, then 65%-75% of kids who live here are enrolled in the district. This lines up with my anecdotal experience of living here and interacting with other parents and kids at the park. Here’s the problem: that number was closer to 85-90% of kids were enrolled only four years ago.

Revenue (Money Coming in)

The best place to find information regarding the District’s revenues is the “Statement of Affairs” documents they must publish annually with the state. You can read them in PDF or see the Excel versions I FOIA’ed from the state. Below is a summary I compiled of annual revenue from those documents:

There are three funding sources:

• Local Sources (82%) - the local tax levy. This is a fixed-rate tax levy coming out of everyone’s property tax bills. The City of Evanston has a decent explainer on the subject. This is NOT tied to enrollment. District 65 could have zero students, and this tax levy would remain the same.

• State Sources (7%) - This consists mostly of the State of Illinois Evidence-based Funding. This uses the most confusing calculator I’ve ever seen, but it does consider enrollment (using a three-year rolling average and skipping 2020), so the funding decline from this hasn’t happened yet, although you will see SY2022 had less money than SY2021. This is due to the drop in enrollment.

• Federal Sources (9%) - This consists of grants and an array of federal programs. Much of this money is already earmarked for specific programs like preschool programs, after-school programs, McKinney-Vento for homeless students, and funding related to Park School. The only money that is not explicitly earmarked is the COVID-relief funds, which I have written about the ESSER funding here, which will expire in the 2025-26 school year.

Recently, District 65 has requested an increase of 5.98% to their tax levy. Evanston Roundtable has a good summary of how the tax hikes work. In general;

Under Illinois’ Property Tax Extension Law, a school district’s authority to increase property taxes for operations is capped at the lesser of the increase in the Consumer Price Index or 5%. The Property Tax Extension Law also allows a school district to levy an additional amount on new construction.

Again, enrollment and the tax levy are entirely separate things. There could be one student left in D65, and everyone would still be paying the same tax, and the District would receive the same revenues. The only drop they’d experience is from a state funding source that comprises only 7% of total funding, and even that program isn’t one-to-one with enrollment.

I would expect the District to continue to ask for the maximum allowable increase in the tax levy for the foreseeable future, especially while the fifth ward school is under construction.²

Fifth Ward School

I’m going to omit most of my discussion regarding new school right now (this deserves an entire post). I do want to highlight that I believe the financial situation regarding this school is not as dire as it might seem;

• Lower enrollment means there is capacity to transfer teachers from other schools to the fifth ward school. They won’t have to hire a full new building of teaching staff.

• The new school will eliminate a big portion of the transportation expenses. In calendar year 2022, District 65 has already paid over $5 million dollars in bus related expenses (Vendors: Brightlift, Positive Connections). That’s 3% of revenues going out the door before the kids even arrive in the classroom. This expense doesn’t go to zero, but even a small % increase is a big savings. Check out my spreadsheet for proof.

• Municipal bonds, interest payments, and taxes are extraordinarily complicated and I do not have a good sense of how this impacts budgets. If you understand this stuff, please reach out to me with specific information.

• Construction costs always go over budget and I do not have a good sense of the true construction costs of the new school. If you know how or what to FOIA regarding this, please reach out to me.

The new school is a priority of the Board and the Administration and they’re asking the community for considerable support. Obviously financial support but really they need political support; transferring teachers is political, laying off bus drivers is political, re-organizing and moving families to different schools is political, and potentially closing a school to save the budget is political.

Every child, every day, whatever the cost (Opinion)

One thing I’ve noticed lately is that District administrators have changed their email signatures to include an additional line in the school district’s motto;

If the enrollment trend continues, we may end up in a situation where a majority of the school-aged children in our town are either homeschooling, attending private school, or not in school at all. At the same time, the District is asking for money for the new school, pet projects, administrative salary raises, and ever-increasing administrative headcount. This seems to me, like a significant political problem.

The current administration is taking the worst possible route: pretending the political problem doesn’t exist. Instead of coming to terms and apologizing to the parents, or even bothering to understand why they are leaving - they’re blaming birth rates. Instead of apologizing for mistakes, they’re doubling down like when I wrote about background checks.

To me, the worst case is not that the fifth ward school doesn’t get built (or gets built). The worst case scenario is they start work on the school and lose political support halfway through. Then, we end up with a construction boondoggle; a half-finished project with massive cost overruns, more families leaving the district instead of transferring schools, voters rejecting future funding increases, and teachers protesting (or striking) because they’re being re-assigned.

As always, if I’m wrong about anything here, please comment or email me and let me know. I do my best to do accurate research and reporting but municipal financing is complicated, so please correct me if I’m wrong and I’ll update.

1. This will be the subject of a future post after I finish FOIA’in the demographer’s contract.

2. I am omitting a longer discussion of the costs of the fifth ward school right now, so this post isn’t too long. I will cover this in a future post on “budgets”