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“The economy of the state and nation are showing signs of a mild recovery,” said William Stafford, District 202’s Chief Financial Officer and the District’s mid-year budget review was cautiously positive as well.
“It’s part of Board policy to do a midyear review, Mr. Stafford said.
“Revenue collections are ahead of last year, due mainly to the fact this year’s property tax collections were collected on time compared to prior years,” Mr. Stafford reported at the Jan. 29 School Board meeting. “Expenditures are in line with budgeted projections.”
Mr. Stafford said that not all school districts in Illinois were in such a good position. “Sixty percent of Illinois school districts are submitting deficit budgets,” he said. District 202’s budget has been balanced for six years running.
Despite Mr. Stafford’s optimistic assessment of the State’s economy,the allocation of General State Aid to the District has been reduced to 88 percent of the appropriated allocation.
“Our biggest concern financially is the State of Illinois,” Mr. Stafford said. Not only has the General State Aid been cut, but payment of the Corporate Property Replacement Tax, which provides the District with $1.5-2.0 million annually is “tenuous” and has already been reduced by 14.7percent, he said.
The District also remains concerned about what the State will decide about the various proposals currently under consideration to address the State’s unfunded pensions, including the Teachers Retirement System (TRS), which has an estimated unfunded liability of $53.5 billion.
A number of the bills submitted last year include proposals to shift the “normal cost” (e.g., the cost attributable to the current year) of funding pensions of teachers in TRS from the State to local school districts. Last year, the State’s “normal cost” to fund TRS was pegged at about $800 million. This does not include the amount needed to pay down the $53.5 billion unfunded liability. The RoundTable has covered this issue extensively, most recently in the Jan. 17 issue.
Another problem for the State is its recent downgrade by Standard and Poor’s to A-. Mr. Stafford said that another downgrade would put the State’s bonds into “junk” status, making it more expensive for the State to borrow money.
Looking ahead, Mr. Stafford said that “Health insurance cost is an area where we will be taking proactive measures … working with our insurance companies and District unions.”
He also warned that the consumer price index, to which tax caps are tied, will be 1.7 percent, reflecting a low inflation rate. Last year the CPI was about 3 percent he said.