Using a zero-based budgeting process in crafting its 2016-17 budget there is a projected deficit of $500,000, Dr. Mary Brown, Assistant Superintendent of Business Services, told members of the District’s Finance Committee at its May 9 meeting.
Proposed efficiencies to balance the upcoming budget do not affect current staff, Dr. Brown said. For the following years, though, the outlook is grim. “We are looking ahead at larger budget deficiencies. Our financial projections in February projected deficits of $5.5 million in 2018 and more than $11 million by fiscal year 2021,” she said,
Directing Board members to a memo that contains an outline of proposed steps to balance the budget, Dr. Brown said the budget, “didn’t balance itself. We will have to be reducing some expenses to have that budget balanced for next year.”
Kathy Zalewski, Business Manager for the District, said the budget projects a 0.8% increase in operating expenses. Salaries, which make up 85% of the budget, are not set yet, as contract negotiations continue. “We can’t include salaries until the contract has been ratified,” she said.
Ms. Zalewski said she and Dr. Brown believe they can cover the projected $500,000 deficit with non-personnel reductions: curriculum supplies, repairs and maintenance and consulting services, as examples. “We have identified $570,000 in non-personnel costs.”
Board member Claudia Garrison said, “It’s good to keep reductions out of the classroom, but reductions in supplies do have an impact on the classroom.”
At the May 9 meeting, Dr. Brown said the amount of funding the District would receive from the State next year was a “huge unknown,” in part because the State has not approved a budget for the present fiscal year, which ends June 30.
Threats from the State in the form of legislation that would severely impact the finances of both District 65 and 202 remain. Last week, the Illinois Senate passed Senate Bill 231 by a vote of 31-21-3. The bill has been sent to the House. If enacted, School District 65 would lose $6.9 million per year and School District 202 would lose $3.1 million per year in State funding, once the phase-in is completed, according to a table presented to legislators.
Other threats from the State are the shift in certain pension costs from the State to the school districts ($318,000 in 2017, increasing to $1.5 million in 2021); revenue reductions in special education (nearly $500,000 per year through 2021); and a property tax freeze (reducing potential revenues by $1 million in 2017, increasing to $6 million in 2021).
“They are pretty drastic, in addition to our drastic financial projections,” said Dr. Brown.
“With the State, we don’t know what we don’t know,” said Superintendent Paul Goren.
Ms. Zalewski said, “I heard that not having a State budget was a boon for school districts, because we actually got all our state money and they paid it earlier, but we really don’t know what the future’s going to bring – and we will adjust accordingly.”
Board member Richard Rykhus said he had been talking with parents and “they had a perception that we sort of cut our way out and things go on. And I encouraged them to watch the Finance Committee meetings so they can hear all the discussions we’re having about the unknown and some of the choices we’re talking about right here – because we’ve trimmed so much around the edges that there’s not a lot of trimming left to be done. I think it’s important that, as we’re out in the community, we share with people that this is very real, in spite of what has occurred some time in the past.”
Ms. Chow said she thought having a year of stability is important but she did not “want people to think ‘The troubles from a year ago are over.’ It’s our responsibility to be vigilant about communicating that.”