Well everyone, it begins. "What begins?," you might ask. Minooka CCSD 201 has begun to issue working cash fund bonds (see here at page 4 of the July 17, 2017 meeting minutes under Item 5.01). This is the end result of years of overspending. It is an eventuality that I have warned about a number of times both in this blog (see here, here, and here) and as a member of the school board.
Essentially, the school board is funding day-to-day expenses with long-term debt (in this case five-year bonds). Why? Because the district has been overspending for years. Rather than cut expenses to meet the revenue that the taxpayers have provided based on the approved tax rates, the school district has created and the school board has approved a cost structure that exceeds such revenue.
This is not something that is responsible for you or I to do in running our households, and it is not responsible for a government body to do either. Many people decry the financial condition of the State of Illinois, the City of Chicago, and Chicago Public Schools, among many others. If one looks back in the history of each of those entities, one would find the point at which they each began to fund day-to-day expenses with long-term debt. That point represents the beginning of the financial crisis that each such entity finds itself in.
No one should expect this to be an isolated event. This represents merely the first of what will likely be many such bond issuances.
