by Sarah DeMaranville
Geneseo Current
Geneseo Community Unit School District 228 is proposing a tentative $1.1 million increase in its 2026 property tax levy, citing rising special education, transportation, and employee benefit costs, along with a decades-old practice of borrowing money to cover operating expenses.
According to district officials, the estimated increase is below the district's average annual levy increase of approximately $1.2 million over the previous five years. The figures remain preliminary, with additional information expected at the November and December Board of Education meetings.
During the October 8 Board of Education meeting, Chief School Business Official and Assistant Superintendent Tim Gronski outlined the district's financial challenges and presented a potential long-term solution to reduce borrowing and interest expenses.
The proposed levy totals approximately $25.5 million. The district projects its school tax rate will decrease from approximately $4.44 to $4.39 per $100 of equalized assessed value (EAV). However, rising property assessments could still mean higher tax bills for homeowners.
Rising Costs and Limited State Funding
According to Gronski, the district's special education costs have increased 78% since 2020. These services are legally required, regardless of whether state and federal funding covers the full cost.
"Special education is the biggest unfunded mandate there is," Gronski said. "And those kids deserve everything we provide for them."
Transportation presents similar challenges. The district transports some special education students to Galesburg daily, and Gronski said the state reimburses approximately 50% of what the district is owed for those services.
Previous district financial reporting showed approximately $2.64 million in transportation expenditures for FY2025, compared with $1.37 million in state aid, covering roughly 52% of those expenses.
Employee benefits are another growing expense. The district's tentative FY2027 budget projected a 29% increase in employee benefit expenditures, including pressures associated with health insurance.
Gronski emphasized that declining enrollment does not automatically reduce costs, particularly when schools must maintain facilities, staffing, and legally required services.
Decades of Borrowing to Pay Operating Expenses
A significant portion of the presentation focused on the district's longstanding reliance on working cash bonds to pay everyday operating expenses.
"So what we do is we borrow money, pay interest, to pay operating costs," Gronski said.
The practice dates back at least to the 1990s. Gronski compared it to repeatedly taking out loans to pay household expenses, such as groceries and mortgage payments.
He pointed to approximately $828,000 in interest associated with a working cash bond on the district's debt schedule, money that ultimately goes toward financing costs rather than educational services.
"Almost a million dollars goes to everybody but children, right? That's what that is," Gronski said.
The district is transferring approximately $3 million from its Working Cash Fund into its Education Fund, yet still anticipates an Education Fund deficit of approximately $1 million.
A Potential Change to the Tax Structure
Gronski argued that the district's current tax structure contributes to its financial difficulties.
Geneseo's Education Fund tax rate is capped at $2.35 per $100 of EAV, limiting how much property tax revenue can be collected for educational operations.
He compared Geneseo with an unnamed nearby school district that collects approximately $1,500 more per student in Education Fund property taxes while carrying substantially less debt-service taxation.
"They're just taxing in the right bucket. We're taxing in the wrong bucket, and we've been doing it for a long time," Gronski said.
Gronski outlined a hypothetical voter-approved increase of 45 cents in the Education Fund tax rate, offset by an equivalent 45-cent decrease in the Bond and Interest tax rate. Under that scenario, part of the district's property tax rate would shift from debt repayment to educational operating expenses; it would not represent a net 45-cent increase in the overall school tax rate.
Under his hypothetical scenario, the overall school tax rate would be approximately $4.42 per $100 of EAV.
"It's a tax rate swap. It's really all it is," Gronski said.
He argued that redirecting tax dollars toward operating expenses could eventually eliminate the need for working cash borrowing and the associated interest costs.
No referendum has been scheduled, and the board has not formally adopted the proposal.
Controlling Expenses as Enrollment Declines
Geneseo's enrollment has fallen from 2,623 students in 2018 to 2,334 in fall 2026, a decline of approximately 11%.
Gronski said the district has reduced four full-time certified positions through attrition and will continue adjusting staffing to reflect enrollment.
"We will control matching staffing with enrollment. That's fiscally responsible, and we would be fools if we didn't do that," Gronski said.
He also presented regional comparisons showing Geneseo's operating expenditures per pupil below the average of comparable districts in Henry, Bureau, and Stark counties.
What It Means for Taxpayers
The proposed levy assumes a 5.56% increase in districtwide EAV, although final property values have not been established.
Gronski estimated that the owner of a property valued at $300,000, experiencing the projected average assessment increase, could pay approximately $237 more annually in school property taxes, or about $20 per month.
Actual increases will vary depending on individual property assessments and exemptions.
The proposed levy remains subject to board approval. The district plans to hold a Truth in Taxation hearing on December 10, even if the final proposed increase is below the 5% threshold that generally triggers the hearing requirement.
While the district continues to face rising expenses, Gronski maintained that addressing its longstanding reliance on borrowing could provide a more sustainable financial future.
"We need to get out of that business, and we need to get into a tax structure that is sustainable, and long term," Gronski said.