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The tentative 2016-17 budget for District 202 is currently about $900,000 out of balance thanks in large part to actions taken by the State of Illinois. And, depending on the outcome of legislation and other actions brewing in Springfield, it could get worse. The District 202 School Board discussed various scenarios that have or could adversely affect ETHS’s budget for this year and into the future at their meeting on April 20.
“Schools are in the worst [financial] position they’ve ever been in… and there is not much prospect of improvement in the near term,” said School Board President Gretchen Livingston. The problem, said Ms. Livingston, is that there “isn’t a sustained way to fund education.”
State Aid Cuts
Numbers provided by ED-RED (Education, Research and Development) – a group that lobbies on behalf of certain school districts in Cook, Lake and DuPage Counties – reflects that the State legislature has approved a 2.25% cut to General State Aid to school districts and a 2.38% cut to Mandated Categorical State Aid for the balance of this school year.
These cuts were made mid-year, said Bill Stafford, chief financial officer for District 202. The District started the school year with a cut of $185,000 in State funding, and then the State cut an additional $90,000.
Illinois now ranks 50th among the States in the amount it contributes to State funding. In addition, the relatively small amount of funds budgeted by the State for education has not been fully funded. What the State is doing, said Ms. Livingston, is budgeting an amount and then not paying it in full or even on time, which has been going on for four to five years now.
The categories of aid recently reduced by the State all affect special education funding. Specifically, cuts were made to aid provided for personnel, private facility, transportation and children services. “They have never done this before,” said Mr. Stafford.
Alongside these cuts came increased funding for State agencies ($664 million), the Governor’s Office ($13.6 million) and distressed schools on the watch list ($97 million). Eighty percent of these funding increases came from a one-time fund sweep and are therefore unsustainable.
Mr. Stafford cautioned the Board that these types of cuts could come again next year.
Additional Cuts/Decreased Revenues
Property Tax Revenues: 85% of District 202’s revenues come from property taxes, which are subject to tax caps. The tax caps limit the District’s ability to increase property taxes to the lesser of the increase in the Consumer Price Index (CPI) or 5%. In the last two years, the CPI was only 1.7% and 1.5%. This year the CPI was only 0.8%.
As a result of the low CPIs, “There has been an incredibly low increase in property taxes,” said Mr. Stafford, “which is the major revenue stream to the District.”
Corporate Property Replacement Tax: District 202 receives between $1.5 million and $2 million a year from the State under the corporate property replacement tax, said Mr. Stafford. The State has put together a task force to look at possibly reallocating this tax, “and I guarantee they aren’t looking at this because they want to give more,” added Mr. Stafford.
Senate Bill 1: District 202 stands to lose $2.2 million if this bill, which reallocates how State aid is allocated to school districts, is enacted.
Pensions: The legislature is considering shifting part of the cost of funding teacher pensions from the State to school districts. If this is done, it will only “add salt to the wound,” said Ms. Livingston.
Increased Expenditures Expected
Staffing affects the budget greatly, said Mary Rodino, Deputy Chief Financial Officer, and there is currently a need to add more. Two additional teachers are needed in the Career and Technical Education department because of the increased enrollment in department electives and the Geometry in Construction class. “Several” paraprofessionals in special education are needed as well. “It’s a bit of an unknown for incoming 8th graders, so in addition to what we do know, there is a piece we don’t know yet. But the trend we’ve seen is that paraprofessionals will need to be added based on special ed needs,” said Ms. Rodino.
After hearing the gloom and doom of the District’s budget projections, the Board discussed strategies for budget reductions. “We know some things so far that will help,” said Ms. Rodino.
Staffing: “We will have some attrition of staff that will help us make cuts without cutting people,” said Ms. Rodino. “We also have some staff we are moving from 12 months to 10 months. We’ve done this in the past and it’s been successful. We try to consolidate tasks amongst staff here in the summer.” The District is also looking for ways to reduce overtime pay.
Contractual Services: Departments will be asked to reduce contractual services by 5-10% across the board. The District plans to use fewer consultants, reduce travel budgets and look for reductions in professional development. Grant money will also be sought.
Supplies: Departments will also be asked to reduce supplies by 5-10%, meaning less office supplies, reduced copying and fewer color copies which cost more than black and white.
The distribution of Chromebooks to current freshman and the planned distribution to other grades over the next few years will decrease the need for some text books and copying, therefore reducing costs further, explained Ms. Rodino.
With cuts to contractual services and supplies, “we’re talking about hundreds of thousands of dollars, substantial reductions,” said Mr. Stafford. He added that staff fears the budget situation could be even worse in 2017 when some form of pension reform is in place. “The District needs to be cautious about any new costly initiatives. I don’t mean to be gloom and doom but we have to deal with the reality on the ground.”
Goals, Values, Money
“I think we need to zero in on this value-based budgeting,” said Board member Jonathan Baum. “I’ve heard that phrase for four years, and we’ve never had a discussion about what those values are except for keeping cuts away from the classroom. Our values are best expressed by our goals. It seems to me we look at the goals as our source of values, then we translate the goals into implementation, then we translate that into a budget. This is a longer term process, but particularly in hard financial times, we need to articulate specifically what our values are and translate those into budget priorities. We need to take a step back. We need to take a big picture look at the budget.”
Several Board members and Superintendant Eric Witherspoon said they agreed. Dr. Witherspoon gave an example of how he presented a list of student support services offered at ETHS at a meeting. Someone asked how a District with less money could accomplish as much. He explained that the budget has to support the school values. “We didn’t print more money…we determined strategies based on what the Board says it most values.”
Board member Bill Geiger brought up the goal-setting process the Board will soon begin. Currently, the Board operates under the guidance of six goals as approved in 2012. In the coming months, the Board will review these goals and alter them if needed. (The goals are spelled out in detail in the Board section of the ETHS website.) “I think the idea in our goal revision is that we stick with our goals; we modify, update and adjust them; and as a Board, we are very explicit as to how they would translate into the budget. I think we have an opportunity to build in a firmer foundation for the tough road ahead in the budgets.”
“Maybe there is an issue of transparency here; we can’t see the values at work,” said Mr. Baum. “And more importantly the public doesn’t see the connection. If we can draw a closer connection between clearly identified values and what that means in the budgetary process that would be very valuable.”
Ms. Livingston wrapped up the discussion by saying, “The message I want to deliver tonight is this. Don’t come to the School Board and complain to us when this hits down the road. The time to act was yesterday. The people you need to talk to right now are your state legislators. We are balancing our budget here, we have a AAA bond rating, we’ve made due with reduced revenues, but the State is a mess. Our State legislators need to get their act together and devote the funding we need for education.”