Several Illinois school districts are celebrating federal approval to borrow tens of millions of dollars with little-to-no interest, but at least one district is turning down the opportunity, saying it's just more debt.
Bremen High School District 228 in Chicago’s south suburbs was notified that they were one of 29 Illinois school districts that were awarded a Qualified School Construction Bond, a federal program dating back to the stimulus package of 2009 that will pay for most, if not all, of a school’s interest on a bond issue.
District 228 is one of only three districts in the state eligible for the maximum allowance of $50 million to spend on school improvements.
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District 228 Superintendent Bill Kendall said the influx of cash will have a big effect on their schools. "We have four schools that have been functional for a long time, but it's time to get excited about some new improvements."
Not all school districts jumped at the program when it was offered last winter. Elgin-area District U-46 didn't apply for the subsidized debt. "It's being subsidized by national taxpayers," school board member Cody Holt said.
Holt said he felt that forcing the nation to subsidize bank fees was irresponsible. "We're asking taxpayers across the nation to subsidize the interest rate on these bonds. It's also not a fiscally responsible thing to do considering our debt at that time was about $520 million."
U-46 board member Jeanette Ward was also against the bond issue. "We already hold (approximately) $550 million in debt, and I am against issuing new debt,” Ward said. “Also, the interest payments were to be predominantly financed by the federal government, which means financed by taxpayers," she said.
Kendall said District 228 will ask for a $5 million tax increase next year instead of $10 million hike because of the bond subsidy. The Illinois State Board of Education had reviewed a total of 193 applications seeking a total $2.4 billion in bond approval earlier this year.