Illinois Working-Cash Bond Bill Goes to Quinn

CHICAGO — Legislation aimed at shoring up Illinois school districts’ ability to tap working-cash bond proceeds for some construction projects or to cope with delayed state school aid payments without the fear of costly challenges to the long-standing practice is headed to Gov. Pat Quinn’s desk.

The Senate approved the bill late last week. The House had previously approved the bill, which amends working-cash fund rules under Article 20 of the Illinois School Code. The intent of the measure is to clarify existing law and the procedures that districts have employed for decades so they don’t have to spend money defending themselves against repeated tax objections, according to its authors.

Under existing law, districts can establish a working-cash fund either with proceeds of a working-cash bond issue or through an annual tax levy. They can then use it to “meet ordinary and necessary” expenses for salaries and other school purposes by transferring the funds to the district’s general fund.

The new legislation makes clear that a district can use the funds for “any and all school purposes.” The legislation also makes clear the ability of a district to permanently transfer money from the fund and to re-establish a fund after closing it. It also clarifies that a district can transfer working-cash funds to any other fund for any school purposes.

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Illinois
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