WOLF LAKE — The Shawnee school district is doing well, considering its tiny enrollment, large area and low population, surrounded by vast expanses of farmland amid the bottomlands of the Mississippi River. But what if something happens to its biggest single funding source?
“Good question,” said Sherry Clover-Hill, superintendent of the district.
Shawnee Community Unit School District 84 — which encompasses pre-K through grade 12 at a single campus — is uncomfortably dependent for its funding on taxes paid by Grand Tower Energy Center, a power plant north on Route 3, a state highway that runs along the Mississippi River in southwestern Illinois.
More than half the district’s annual revenue comes from property taxes. And 58 percent of the property taxes are from the power plant, or nearly a third of the district’s total budget.
Due in large part to the value and tax assessment of the power plant, Shawnee is not considered a needy district, according to a state formula used in allocating funding.
“Because of the power plant, the state says we’re locally wealthy,” Clover-Hill said with a laugh.
The school district is spread over 400 square miles and three counties, with a total enrollment of only 375 students. The most populous community in the district is Grand Tower, with about 600 residents.
Grand Tower Energy contributes more than $1.5 million toward the district’s $4.65 million annual budget. The company changed hands a few years ago, when Ameren Illinois sold it to Texas-based Rockland Capital.
“Ever since it changed hands, it’s been difficult to get them to pay their taxes,” Clover-Hill said.
Rockland Capital did not respond to requests for an interview.
“We’re very fortunate to have a lot of support from farmers in the area,” Clover-Hill said. “Our FFA gets huge support from local farmers.”
One of those farmers is Randy Lambdin, who served on the school board during the transition of ownership of the power plant. It was converted from a coal-fired plant to one that burns natural gas. The extensive renovation resulted in a higher tax assessment by Jackson County.
The fluctuating nature of the tax assessment, which has been negotiated by the power plant, put the school district in a precarious place. When the power plant declined to pay its property taxes a couple of years ago, Shawnee was forced to operate for several months without that portion of its revenue. Fortunately for the district, there was enough money in reserve to function.
“It was devastating to us when that other company did become involved,” Lambdin said. “They had raised us up to another level, then cut us off at the knees.”
But he saves most of his criticism for the system itself.
“The whole property tax system is antiquated. You have small amount of people paying a majority of the funds for the school district,” Lambdin said.
Illinois law allows a third party to purchase delinquent tax levies from businesses as well as homeowners in a tax sale. If the tax bills are unpaid for three consecutive years, the party that has purchased the taxes can gain ownership of the property.
As is usually the case in these sales, Grand Tower Energy eventually redeemed the property by paying the past due taxes, interest and fees.
There is no indication the power plant will cease to exist in the near future, or that its tax assessment will be drastically reduced. But if Shawnee is someday forced to proceed without that tax contribution, it is unclear what will happen.
A measure signed into law by Gov. Bruce Rauner last year addresses funding discrepancies among school districts. A shift from heavy reliance on property taxes is one of the law’s stated goals. Shawnee didn’t receive as big a revenue boost from the state as other districts.
“With the new funding formula, we didn’t get as much as some schools around us because of the power plant,” Clover-Hill said. “This funding formula is so new, we’re trying to make what-if scenarios. Will state aid kick in, and how long would it take to kick in?”
Meanwhile, the school district continues to thrive. The school got a boost a few years ago, when it was the recipient of a grant from Monsanto. It was used to purchase agricultural equipment and modernize its lab.
David Ardrey, executive director of the Association of Illinois Rural and Small Schools, sees Shawnee as a success story. But the tentative nature of property tax and shrinking economies in some rural areas threaten school systems.
“Once those schools are gone, the focal points of those communities are gone,” he said. “We don’t want to have a conversation about the negative side. We’re trying to do everything we can to keep these schools open. They’re vital; they’re critical to those communities.”
There is also a societal element to rural school closure and consolidation, adds Paul Lasley, Extension sociologist with Iowa State University.
“The closing of a school is really the closing of a social institution,” he says. “That school has provided an identity for that community for many years. The attachment is very, very strong.”
Lasley says in most cases, the process is a long one and residents have noticed the shifts — recalling when enrollment was strong.
“When closure or consolidation happens, it doesn’t necessarily come as a surprise to anyone. They have seen the changes over the years,” Lasley says. “They have seen the migration out of the community, and have seen the population and enrollment drop. While it’s not a surprise, the finality of it all can be difficult on a community.”
— Additional reporting by IFT’s Jeff DeYoung.