State to help financially troubled Cairo schools

SPRINGFIELD, Ill. -- The State Board of Education on Thursday voted to set up an advisory board to save a Southern Illinois school district from bankruptcy, the third such panel created in less than two months.

State schools superintendent Robert Schiller will appoint members to a financial oversight panel to monitor and approve a bailout plan for the Cairo school district.

Board officials said Cairo will be out of money in two months if nothing is done. It has paid more than $60,000 in operational expenses from funds restricted to specific purposes and last month borrowed $414,000 -- the most allowed by law -- against future property tax receipts.

Cairo joins the Livingston school district in Madison County and the Hazel Crest school district in Cook County as a financially troubled district needing state intervention since December.

School district deficits

Schiller said then that as many as 20 school districts were on the brink of bankruptcy and that the sluggish economy, less state assistance and eroding property tax bases could leave as many as 80 percent of the state's districts with deficits by the end of the budget year June 30.

"Cairo's situation adds to the growing list of districts that, without state assistance, might have to provide less than a full year of school for students," Schiller said in a statement.

State board officials plan to announce next month its findings in applying a new, more in-depth financial assessment process intended to identify school funding problems sooner. Districts in the deepest trouble likely will be identified then, board spokesman Lee Milner said.

'Appropriate intervention'

Gov. Rod Blagojevich, speaking to reporters at a state Capitol news conference, said he plans some announcements about education issues soon. As for Cairo and the other districts, he said his staff is "looking at what the appropriate intervention from our office is, or whether there is or isn't one."

The oversight panel has to approve any spending plans Cairo officials develop. It may recommend a state grant of $230,000 and a loan of as much as $900,000.

There are now five school districts under state supervision -- the East St. Louis school district has been monitored since 1994 and the Round Lake school district in Lake County since 2000.

Last August, control of Round Lake was given to a more powerful school finance authority, which hires its own staff to run the district and decides spending. Another finance authority took control of Hazel Crest in December.