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Mary Brown, chief financial office of School District 65, told School Board members at their March 2 meeting that the State may not come through with $4.7 million in anticipated State funds in the 2010-11 school year.
Based on information received from PMA, the District’s financial advisers, the Association of School Boards and other sources, she said, “We need to change our budget assumptions to assume that we may not receive any general State aid payments next year, for the 2010-11 school year. That amount is $3.7 million. And we were also advised to reduce our categorical payments down to expect only three next year. We had four in our initial projection. And that is another $1 million, on top of what we had anticipated as a deficit of $0.8 million for the 2010-11 school year.
“So if indeed those reductions are made, and we may know more after the governor’s budget address on March 10, that would mean we would be looking at a projected deficit next year of $5.5 million.”
At a Board Finance Committee meeting on March 11, Dr.
Brown said the amount of funding District 65 will receive from the State is uncertain and in a state of flux. After Governor Pat Quinn laid out his proposed budget, she said there was a chance the District’s general state aid would not be cut, but there would be cuts in foundational funding and some categorical payments that would result in a projected deficit for District 65 in the amount of $2.4 million.
At the Board’s March 15 meeting, Dr. Brown said the District was told to expect a reduction of an additional $300,000 in State funding, bringing the potential deficit to $2.7 million.
Dr. Brown said the District may not know the amount of State funding it will receive until May or June, when the legislature firms up funding for education and adopts a budget for the State.
Superintendent Hardy Murphy said the administration would prepare two budget scenarios, one to address a potential deficit of $2.7 million, and the second to address a potential deficit of $5.5 million. “We’re going to have working documents and working plans for each scenario,” he said.
“We don’t want to overreact, especially if we impact staff or services,” he continued. “But, at the same time we want to be prepared. If we don’t hear anything favorable, you’ll see us leaning more towards the $5.5 million scenario.”
Everything is on the Table
Finance Committee Chair Katie Bailey summarized the sentiment of the Committee that, “We want [budget cuts] to be as far away from the classroom as possible.” She also said, “For now, there is no increase in the class size guidelines.”
While saying that he thought the District could address the projected deficit without increasing the class size guidelines, Dr. Murphy said, “Everything’s on the table.”
He said 80 percent of the District’s expenses go toward salary and benefits. “When you start having to make decisions, you have to start looking person by person, program by program and service by service. It ultimately means fewer people are going to have to do more,” he said.
“What you try to do is not create a situation where it has a disproportionate and negative impact on the teaching and learning experience.”
At this point, no cuts have been identified.
Dr. Murphy said the District was attempting to avoid the need to send notices of a “reduction in force,” RIF, to teachers and staff. Under state law, he said, a RIF notice must be given to tenured teachers 60 days before the end of a school year, non-tenured teachers must be given 45 days notice, and non-instructional personnel 30 days notice.
Dr. Murphy said the administration has identified teachers and staff who are eligible for full retirement benefits, and the District may offer them incentives to take early retirement, which may reduce the need to issue RIF notices. In addition, he said replacing retiring teachers with less experienced teachers at a lower salary would reduce the District’s expenses.
“We’re kind of pulling out all the stops and trying to come up with a way we can preserve the jobs of the teachers we have now so we can get through this without eviscerating our instructional programs,” he said. “We’re trying to come up with a strategy where we in fact do not have to RIF any of our teachers.”
Dr. Murphy said the District is looking at April 25 as the date on which it may have to issue RIF notices. He said administrators are monitoring developments at the State level to see if there is “a reason to take a gamble to lead us toward the $2.7 million budget scenario.”
Jean Luft, president of the District Educators Council (the teachers’ union) said, “There’s a lot of angst for the staff.” She suggested the Board send a letter to staff advising them of the status of the financial situation.
Dr. Murphy said the administration would present two budget scenarios to the Finance Committee in May, and the plan is to have a draft tentative budget by June.
During the past seven months the Finance Committee has been reviewing information concerning the District’s funding sources, the net cost of programs, non-personnel expenses, transportation and building expenses, and the cost of early childhood, reading and special education programs and expenses. On March 11, the Committee reviewed class sizes and staffing levels.
While the Board initially planned to use the information gathered through these reviews in deciding how to deal with deficits projected for 2011-15, Ms. Bailey said the Board would need to accelerate its schedule and use this information to address the deficit now projected for 2010-11.
On Feb. 8, before receiving news that the State was considering massive cuts in funding for education, the District’s staff projected deficits totaling $31.2 million over the next five years, $0.8 million in 2010-11, $3.4 million in 2011-12, $6.9 million in 2012-13, $9.1 million in 2013-14, and $10.9 million in 2014-15.