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At a Finance Committee meeting on May 10, School District 65 administrators proposed cutting expenses by $5.1 million for the 2010-11 school year. On a big picture basis, the District is proposing cuts of $2.2 million in instructional programs, $1.4 million in administrative functions, and $1.6 million in other reductions.

These reductions would balance next year’s budget if the District’s state funding is cut by $5 million, the worst case scenario postulated by District administrators. Under Governor Pat Quinn’s budget plan, the state would cut $1.3 billion in education funding next year.

In the instructional area, Mary Brown, the District’s chief financial officer, said the District would have savings as a result of 12 teachers retiring and being replaced by new teachers at lower salaries. She said the District would also reduce costs by reducing the number of reading support teachers, pre-K teachers, bilingual teachers, middle school teachers and special education teachers.

In the administrative area, Dr. Brown said some administrative positions that were currently vacant would not be filled, including an assistant director of special education and a special education supervisor. Reductions will be made in other administrative positions, she said.

At this stage the proposed reductions have been presented in general terms. Dr. Brown told the RoundTable that the total number of personnel reductions would not be available until the Board’s meeting on May 17.

In proposing the budget reductions, Superintendent Hardy Murphy said the administration attempted to ensure that “we continue to provide supports to our teachers for special development and training. …we also tried to make sure that we maintained our class sizes. …we also wanted to make sure we had a full wave of support personnel.

“The reductions are not in and of themselves reductions that eviscerate the quality of our education programs,” Dr. Murphy said. “We tried to maintain the integrity of our instructional effort, and I think we have done that. …As we go forward next year we’ll need to take a look at it to see how things are operating. But there shouldn’t be anything in here that is a deal-breaker as far as the quality of the program for our students.”

The amount of state funding the District may receive next year is uncertain and in a state of flux. The District has prepared five-year financial projections using three different assumptions concerning the amount of state funding it will receive next year: a “best case” scenario, which assumes cuts of $2 million; a “middle of the road” scenario, which assumes cuts of $4 million; and a “worst case” scenario, which assumes cuts of $5 million.

If District 65 reduces expenses by $5.1 million, Dr. Murphy said the budget for the 2010-11 year will be balanced, even under the worst case scenario. He said, though, he thought state funding would probably come out somewhere in the middle.

Under the middle of the road scenario, assuming the District reduces expenses by $5.1 million next year, the District would have a surplus of $1.4 million for the 2010-11 school year. And, assuming that state funding is restored to past levels for 2011-12 and in subsequent years and also assuming that the $5.1 million in budget reductions are carried forward to subsequent years, the District is projected to have a surplus of $3.6 million in 2011-12 and then deficits of $2.6 million, $3 million and $4.7 million in the following three years. Over the five-year span, the District is projected to have a cumulative net deficit of about $5.3 million.

If State funding is not restored to past levels, the financial projections “will look drastically worse,” said Kathy Zalewski, comptroller for the District, in a memo to the Finance Committee.

While a reduction of $5.1 million in expenses would leave a surplus of $1.4 million next year under the middle of the road scenario, the additional cuts provide a cushion if state funding is cut by $5 million, which administrators view as the worst case scenario.

In addition, substantial reductions in spending next year will help to address projected deficits in ensuing years. Absent making reductions in spending, the District projected in February that it would operate with cumulative deficits of about $31 million over the next five years. The Finance Committee had been planning to address those projected deficits starting with the 2011-12 school year. The potential cuts in state funding may accelerate that schedule.

Absent some clear direction that the State will provide more funding than anticipated, Finance Committee Chair Katy Bailey summed up the sentiment of the Finance Committee: the District will plan to reduce expenses next year by $5.1 million.