Too many districts: Illinois school district consolidation


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EXECUTIVE SUMMARY
ILLINOIS POLICY

Too many districts: Illinois school district consolidation provides path to increased efficiency, lower taxpayer burdens
SPRING 2016 By Ted Dabrowski, Vice President of Policy, and John Klingner, Policy Analyst

Illinois has the most units of local government of any state in the country. Many of its nearly 7,000 units of local government are overlapping, duplicative and contribute to Illinois’ growing debt, waste and corruption. These local units of government are also responsible for Illinois’ growing property taxes, which already rank as the third-highest in the country. Many of the state’s local governments could be consolidated – which would help to reduce their negative effects.
Among the key candidates for consolidation are the state’s 859 local school districts, which consume nearly two-thirds of the $27 billion in local property taxes that local governments across Illinois collect each year. Illinois has the fifth-largest number of school districts in the nation.
Nearly 25 percent of Illinois school districts serve just one school, and over one-third of all school districts have fewer than 600 students. An additional layer of administration for these districts is inefficient.

More than a third of Illinois school districts serve fewer than 600 students Illinois school districts by student enrollment, 2014 - 2015

Number of students enrolled
10,000 or more 2,500 to 9,999 600 to 2,499 599 or less Total

Number of districts 23
155 387 294 859

Percent of total 3%
18% 45% 34% 100%

Source: Illinois State Board of Education, “Annual Report 2015”

@illinoispolicy

On average, Illinois school districts serve just 2,399 students per district, the fifth-lowest among states with school populations over 1 million. Conversely, California school districts average 6,067 students. If Illinois school districts served the same number of students as California, Illinois would have 500 fewer school districts than it has today.

By cutting the number of school districts in half, Illinois could experience district operating savings of nearly $130 million to $170 million annually and could conservatively save the state $3 billion to $4 billion in pension costs over the next 30 years.

A majority of those savings would be realized by a reduction in district staff. Not only do taxpayers fund the principals, administrators, teachers and buildings at the school level, but they also pay for an additional – and often duplicative – layer of administration at the school district level.

The cost of administrative staffs at school districts adds up quickly. Nearly all districts have superintendents and secretaries, as well as additional personnel in human resources, special education, facilities management, business management and technology. Many districts retain at least one assistant superintendent as well.

Administrative salaries in school districts end up consuming a significant portion of public funding. More than three-quarters of Illinois’ superintendents have six-figure salaries, and many also get additional benefits in car and housing allowances, as well as bonuses. In addition, their high salaries lead to pension benefits of $2 million to $6 million each over the course of their retirements.
Top administrators in Illinois can expect to receive millions in benefits over the course of their retirements Current pension and estimated total pension payout of 10 highest-paid school district pensioners in Illinois

Name Wyllie, Lawrence Bangser, Henry Catalani, Gary Murray, Laura Curley, Mary Gmitro, Henry Hager, Maureen May, Loren Hintz, James Lamberson, Jonathan E.

Last employer
New Lenox, Lincoln-Way CHSD 210
Northfield, New Trier TWP HSD 203
Wheaton, Community Unit SD 200
Flossmoor, HomewoodFlossmoor CHSD 233
Burr Ridge, Hinsdale CCSD 181
Bloomingdale, Community CSD 93
Highland Park, North Shore SD 112
Glendale Heights, Marquardt SD 15
Lincolnshire, Adlai Stevenson HSD 125
Riverside, Riverside SD 96

Final average salary $261,707 $307,375 $316,260 $318,509 $302,194 $313,070 $308,937 $357,117 $275,256 $350,022

Current annual pension $302,991 $294,524 $293,214 $288,472 $280,172 $273,573 $271,653 $267,838 $264,280 $262,516

Estimated total pension
payout* $3,699,648 $7,503,861 $7,722,901 $8,618,414 $8,690,644 $7,434,857 $8,269,057 $5,118,688 $6,761,829 $7,591,835

02

Source: Retiree data obtained from Teachers’ Retirement System pursuant to a 2015

FOIA request, Social Security Administration actuarial data

* “Estimated total pension payout” is based on approximate life expectancies and retirees’

ages as of 2015.

@illinoispolicy

For an example of districts where consolidation makes sense, consider New Trier Township High School District 203 and its six elementary feeder districts. Combining these seven districts into one would eliminate many of the 136 administrators directly employed at the seven district offices, saving local taxpayers over $12 million a year in salaries alone, or over $1,000 per student.
Another example is Homewood-Flossmoor Community High School District 233 and its two elementary feeder districts. Consolidation would cut down on the three districts’ 68 office administrators, saving local taxpayers over $5 million a year in salary costs, or over $750 per student.
Those savings don’t include the massive reduction in pension costs that would also occur through consolidation.
The consolidation solution
This report does not encourage school consolidation – the decision to consolidate schools should remain in the hands of local taxpayers. But these same local taxpayers shouldn’t be on the hook for multiple layers of government – in the form of school districts – that duplicate services, waste tax dollars, increase government debt, and decrease transparency.
Given the challenges facing consolidation efforts, district consolidation will only happen when the state partners with local districts to discuss concerns and craft a solution.
That partnership should come in the form of a district consolidation commission, which would work with local governments to create consolidation and reorganization guidelines, select candidate districts, and establish a process for implementation. The commission would also support the creation of legislation that would mandate its proposed recommendations through an up or down vote, meaning no amendments would be permitted, in the General Assembly.
However, the commission should also be relatively narrow in its scope of recommendations. School district consolidation should focus on reining in the duplicative costs of district administration only – not on equalizing salary contracts or funding new facilities. The state should not provide any incentives for those items, nor should it mandate any school consolidations. And to prevent local property taxes from rising, the commission should develop policies on limiting the merger of local bargaining units in newly combined districts.
If considered carefully and implemented properly, school district consolidation could provide serious financial benefits to both local taxpayers and the state, have a positive effect on student outcomes, and increase government transparency at the local level.
03

ILLINOIS POLICY INSTITUTE SPECIAL REPORT
Too many districts: Illinois school district consolidation provides path to increased efficiency, lower taxpayer burdens
By Ted Dabrowski, Vice President of Policy, and John Klingner, Policy Analyst

SPRING 2016 GOOD GOVERNMENT

Additional resources: illinoispolicy.org 190 S. LaSalle St., Suite 1500, Chicago, IL 60603 | 312.346.5700 | 802 S. 2nd St., Springfield, IL 62704 | 217.528.8800

ILLINOIS POLICY

Table of contents
PAGE 03
Introduction
PAGE 05
Illinois has too many school districts Too many small districts Merging elementary districts with their high school district
PAGE 09
The high cost of school district administrations Salaries Pensions
PAGE 12
Case studies: New Trier and Homewood-Flossmoor
New Trier Township Homewood-Flossmoor area
PAGE 17
What the research says
PAGE 20
Consolidation roadblocks in Illinois and how to overcome them
The path to consolidation
PAGE 22
Conclusion
PAGE 23
Endnotes
PAGE 24
Appendix A
PAGE 29
Appendix B
PAGE 32
Guarantee of quality scholarship

Introduction
Illinois has the most units of local government of any state in the country. Many of its nearly 7,000 units of local government are overlapping, duplicative and contribute to Illinois’ growing debt, waste and corruption.1
And the more government bodies Illinois has, the higher property taxes go – property taxes are the primary financing vehicle for municipal governments, park and library districts, and schools. Illinois already has the third-highest property taxes in the nation2 and without a significant consolidation of government entities, Illinoisans should only expect their tax bills to rise.
Among the key candidates for consolidation are the state’s 859 local school districts, which consume nearly two-thirds of the $27 billion in local property taxes that local governments across Illinois collect each year.3 Illinois has the fifth-largest number of school districts in the nation, and many of those districts are ripe for consolidation.
A reduction of school districts by half, for example, could lead to annual operating savings of nearly $130 million to $170 million annually and could conservatively save the state $3 billion to $4 billion in pension costs over the next 30 years.4
Those savings would be realized by a reduction in district staff. Not only do taxpayers fund the principals, administrators, teachers and buildings at the school level, but they also pay for an additional – and often duplicative – layer of administration at the school district level.
The cost of administrative staffs at school districts adds up quickly. Nearly all of these districts have superintendents and secretaries, as well as additional personnel in human resources, special education, facilities management, business management, and technology. Many districts retain at least one assistant superintendent as well. Often, these administrative staffs support school districts that have either too few students or too few schools to warrant so much bureaucracy.
For example, nearly 25 percent of Illinois school districts serve just one school, and approximately one-third of all school districts have fewer than 600 students. An additional layer of administration for these districts is inefficient.5
On average, Illinois school districts serve just 2,400 students per district, the fifth-lowest among states with school populations over 1 million. Conversely, California school districts average 5,963 students. If Illinois school districts served the same number of students as California, Illinois would have 500 fewer school districts than it has today.
Administrative salaries eat up much of public school funding. More than three-quarters of Illinois’ superintendents have six-figure salaries, and many also get additional benefits in car and housing allowances, as well as bonuses. Their high salaries lead to pension benefits of $2 million to $6 million each over the course of their retirements.
03

Top administrators in Illinois can expect to receive millions in benefits over the course of their retirements Current pension and estimated total pension payout of 10 highest-paid school district pensioners in Illinois

Name Wyllie, Lawrence Bangser, Henry Catalani, Gary Murray, Laura Curley, Mary Gmitro, Henry Hager, Maureen May, Loren Hintz, James Lamberson, Jonathan E.

Last employer
New Lenox, Lincoln-Way CHSD 210
Northfield, New Trier TWP HSD 203
Wheaton, Community Unit SD 200
Flossmoor, HomewoodFlossmoor CHSD 233
Burr Ridge, Hinsdale CCSD 181
Bloomingdale, Community CSD 93
Highland Park, North Shore SD 112
Glendale Heights, Marquardt SD 15
Lincolnshire, Adlai Stevenson HSD 125
Riverside, Riverside SD 96

Final average salary $261,707 $307,375 $316,260 $318,509 $302,194 $313,070 $308,937 $357,117 $275,256 $350,022

Current annual pension $302,991 $294,524 $293,214 $288,472 $280,172 $273,573 $271,653 $267,838 $264,280 $262,516

Estimated total pension
payout* $3,699,648 $7,503,861 $7,722,901 $8,618,414 $8,690,644 $7,434,857 $8,269,057 $5,118,688 $6,761,829 $7,591,835

Source: Retiree data obtained from Teachers’ Retirement System pursuant to a 2015 FOIA request, Social Security Administration actuarial data * “Estimated total pension payout” is based on approximate life expectancies and retirees’ ages as of 2015.

@illinoispolicy

Superintendents are only a part of district administrative costs. Other staff members, while compensated at lower levels, also contribute to overhead costs within Illinois’ education system.
Despite the clear duplicative costs present in the current system, the path to school district consolidation has significant hurdles. Local officials and residents often have concerns about the loss of local control and issues related to the economics of merging with a nearby district.
Others are concerned that district consolidation could lead to the consolidation of schools. To be clear, the purpose of this report is to address the benefits of district consolidations – not school consolidations. School consolidations should remain a decision of the local boards of any newly unified school districts. As such, any proposals by the state to consolidate school districts should remain neutral on the subject of school consolidations.
If considered carefully and implemented properly, school district consolidation could provide serious financial benefits to both local taxpayers and the state. Moreover, research has shown that district consolidations can have a positive impact on student outcomes
04 and can increase government transparency and community participation.

Illinois has too many school districts
From 1930 through 1970, a gradual consolidation process eliminated 9 of every 10 school districts nationally. The number of districts in the U.S. fell dramatically, to fewer than 20,000 from over 120,000.6
Illinois followed similar trends. In 1942, Illinois had more than 12,000 districts – the most of any state in the nation. Over 10,000 of these were one-room schools with an average enrollment of 12 students. By 1955, the state had cut the number of districts to 2,242, and by the year 2000, the district count had fallen to 894.7
Today, Illinois has 859 school districts. Nearly 45 percent are elementary, 12 percent are secondary (high school), and 45 percent are unit districts, meaning they serve both elementary and secondary students.
Illinois home to more than 850 school districts Number of school districts in Illinois by district type, 2015

387 Unit districts (K-12)

859 Total districts

373 Elementary
districts (K-8)

Source: Illinois State Board of Education, “Annual Report 2015”

99 Secondary districts (High school)
@illinoispolicy

Despite the massive reduction in Illinois school districts, the state is still not efficient when compared with its 14 peer states that also serve 1 million or more students. Florida, for example, averages 40,012 students per district. Georgia, North Carolina, California and Virginia all serve more than twice the 2,400 students per district Illinois does.8

05

Illinois’ school districts are inefficient compared with districts in peer states Students per district in states with more than 1 million students, 2013-2014

State
Florida North Carolina Virginia Georgia California Texas New York Washington Pennsylvania Indiana Illinois New Jersey Michigan Ohio Arizona

Total student enrollment
2,708,062 1,441,447 1,279,544 1,723,439 6,236,672 5,135,880 2,564,711 1,060,298 1,725,820 1,034,285 2,075,209 1,352,000 1,484,612 1,854,881 1,078,033

Total number of school districts
67 115 132 198 1,028 1,227 695 295 499 369 865 590 773 1,016 627

Students per district
40,419 12,534
9,694 8,704 6,067 4,186 3,690 3,594 3,459 2,803 2,399 2,292 1,921 1,826 1,719

Source: National Education Association, “Rankings & Estimates 2014 - 2015”

@illinoispolicy

If Illinois school districts served the same number of students as school districts in California, the most populous state in the country, serve, Illinois would have just 342 school districts. And if Illinois school districts served the same number of students as North Carolina’s, Illinois would have just one-fifth of the school districts it has today – and one-fifth of the administrative bloat.

Illinois would have 14-94% fewer school districts if it mirrored student-to-district ratios of peer states Comparison of Illinois with the 9 most student-to-district-efficient states with student populations over 1 million

06

State Illinois

Total student enrollment
2,075,209

Total districts
865

Students per
district
2,399

Number of school districts IL would have if it mirrored the studentto-district ratio of each peer state
--

Number of districts IL would eliminate if it mirrored the student-todistrict ratio of each peer
state
--

Percent of total districts
IL would eliminate if it mirrored the student-todistrict ratio of each peer
state
--

Florida

2,708,062

67 40,419

51

814

94%

North Carolina 1,441,447

115 12,534

166

699

81%

Virginia

1,279,544

132

9,694

214

651

75%

Georgia

1,723,439

198

8,704

238

627

72%

California

6,236,672 1,028

6,067

342

523

60%

Texas

5,135,880 1,227

4,186

496

369

43%

New York

2,564,711

695

3,690

562

303

35%

Washington

1,060,298

295

3,594

577

288

33%

Pennsylvania 1,725,820

499

3,459

600

265

31%

Indiana

1,034,285

369

2,803

740

125

14%

Source: National Education Association, “Rankings & Estimates 2014 - 2015”

@illinoispolicy

Too many small districts
Small student populations in many Illinois districts also contribute to the inefficiencies of Illinois education. Of Illinois’ 859 school districts, more than one-third serve fewer than 600 students. An additional layer of administration, over and above what already exists at the school level, is excessive and expensive for school districts of this size.

More than a third of Illinois school districts serve fewer than 600 students Illinois school districts by student enrollment, 2014 - 2015

Student enrollment 25,000 or more 10,000 to 24,999 5,000 to 9,999 2,500 to 4,999 1,000 to 2,499 600 to 999 300 to 599 Fewer than 300 Total

Number of districts 5
18 46 109 233 154 162 132 859

Percent of total districts 1% 2% 5%
13% 27% 18% 19% 15% 100%

Source: Illinois State Board of Education, “Annual Report 2015”

@illinoispolicy

There are many school districts that oversee too few schools. Twenty-five percent of school districts in Illinois, or 212, are single-school districts.
Another 152 school district offices serve just two schools. This kind of mismanagement presents plenty of opportunities to merge district supervision and reduce administrative costs without interfering with the schools’ daily operations.

44% of Illinois school districts serve only 1-2 schools Number of schools in a district as a percentage of all Illinois school districts, 2014 - 2015

44% 1-2 schools

23% 5 or more schools

11% 4 schools

07
Source: Illinois State Board of Education

22% 3 schools
@illinoispolicy

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Too many districts: Illinois school district consolidation