BLOOMINGTON -- The promise of about $831 million in federal stimulus money for Illinois schools is nice, local superintendents say, but they still are waiting for chronically late state aid payments that jeopardize needed programs.

"Late money is better than lost money," said Clinton school Superintendent Jeff Holmes. "But at some point, you still have to make some tough decisions which impact your students."

While the state has been funding the General Student Aid formula of $291 per student, it runs months behind in specific funding areas, including special education and transportation.

For districts throughout Central Illinois, covering for that missing state aid may mean tapping already low reserves, borrowing money to cover expenses or cutting services.

The problem is hardly new and has persisted through good and bad economic times. The Education Resources Information Center reports the state of Illinois has been slow on state aid payments since the 1992 recession.

"These are extremely tough economic times and I know the flow of state aid is a major issue for school districts right now," said Christopher Koch, state superintendent of schools. "We get calls to our office every day from districts that need overdue payments to run programs."

Illinois schools got $831 million from the federal American Recovery and Reinvestment Act for special education and programs for low-income children. That helps because the state runs chronically behind on special-education grants, but it's not enough to make up for the state funding delays.

And it seems unlikely that the state will catch up anytime soon. Facing the prospect of an $11.6 billion deficit, the state began its new fiscal year Wednesday without a budget and a stalemate on producing one.

Meanwhile, districts across the area try to make do.

Holmes said his district still is waiting for about $400,000 for the 2008-09 school year. At risk is the early childhood program that, among other things, teaches parenting skills to families with pre-kindergarten children.

"This is a program that helps at-risk students and provides education and support so that when these students enter our school system, they are better prepared," he said. "Without this, some students are not prepared and the negative impact creates a domino effect that continues for several years."

The school board is considering funding the program locally for the coming school year and then evaluating its status next summer.

The Normal-based Unit 5 school district is hoping to receive more than $4.5 million in delayed state aid by the end of July. That's about 18 percent of about $25 million in state aid expected for fiscal 2008-09.

If $2.2 million in transportation money doesn't arrive this month, Unit 5 may have to borrow to pay its bus leases, said Jim Gillmeister, Unit 5's chief financial officer.

"I think its coming it's just a matter of when," Unit 5 Superintendent Gary Niehaus said of state funding.

Bloomington's District 87 is running about $1 million behind, said David Wood, who oversees a $45 million budget as chief financial and legal officer.

In 2008, District 87 didn't receive its fourth-quarter payment, which was due in the spring, until after the start of the new fiscal year July 1. This year it's worse.

"We still haven't got that third (quarter) payment, and we're starting to wonder if we'll get the fourth quarter at all," he said. "The bigger question is what is the state going to do? Next year, will we only get two of the payments? There's so much uncertainty it's difficult for us to plan."

District 87 hasn't had to borrow any money, but tapping reserves mean a lower amount to invest in reserves "and because interest rates are down, every investment dollar matters even more," he said.

Pontiac's high school district is waiting for about $400,000, said Superintendent Leo Johnson. That's bad news for a district trying to stay off the state's financial watch list.

The district's cash on hand has gone from 130 days to 115 days. Ideally, a district should have enough reserve on hand to operate for 180 days to be financially stable and to stay off the watch list, Johnson added.

"The real pinch comes from running a balanced budget," Johnson said. "When we are waiting for payments, that eats away at our reserves."

In anticipation of the delayed payments, Johnson said the district cut about $300,000 from its $10 million budget.

The Streator grade school district, facing a $1.3 million deficit, began to cut staff by attrition, increased class sizes slightly to an average of 22 students and put an indefinite hold on building projects.

A tax increase is the "last resort," said Superintendent Christine Benson.

Phyllis Coulter, Mary Ann Ford, Greg Stanmar and Michele Steinbacher contributed to this report.

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