D112 Referendum Fails Cost-Benefit Test: Letter

The following letter was written and submitted by Jeff Hamburg.

By placing its referendum on the March ballot, District 112 calls for Highland Park, Highwood and Fort Sheridan property owners to take on one of the largest and longest school bond in state history, $198 million plus interest for 30 years—more than a generation. Imagine today’s D112 5th graders. Now picture them growing up and moving back to Highland Park in their 30’s, or even their 40’s. As returning adults, they would pay taxes on the same bond and its $145 million of interest presented to voters today! Talk about crushing student debt! This scenario seems just plain wrong because a 30-year bond term is highly unorthodox. When the district rejected less drastic configurations, they found they would have to stretch our payments over 30 years to make the annual tax installments seem acceptable.

We might assume that $198 million buys “a lot” under the proposed plan, but that is not the case.

For starters, the district admits this outsized burden will not ensure its solvency and will not prevent a future operating referendum. So on the one hand, the district acknowledges more borrowing will likely be necessary notwithstanding this outsized debt; on the other hand, the district ignores that once the bond is in place, it will not have any more borrowing authority, at least not at reasonable rates. Unable to cover expenses, the district’s only recourse would then be massive spending cuts to make up the shortfall.

We could also assume $198 million would buy great new facilities. Instead, the district promises to close six neighborhood schools (and counting, Ravinia) when the referendum passes. These would be replaced by one middle school the size of a high school. And what does the additional $145 million in interest buy? Ask the bankers.

Financially, the district’s plan is a mess. But the district’s plan is so divorced from value, so divorced from our community values, I would not vote for it even if it was free.