The District 202 School Board unanimously approved a tentative budget for FY 2018 at their meeting on June 12. Mary Rodino, Chief Financial Officer for the District, presented highlights of the budget which is balanced for the twelfth consecutive year, but she also addressed some areas of concern for the future.
The tentative budget provides for a total of $83.9 million in expenditures, including capital expenses, which is a 0.8% increase over last year. The operating budget is $74 million, which is a 2.3% increase over last year, due mainly to salary obligations.
“The State with its uncertain budget situation continues to be a constant financial concern to the District,” said Ms. Rodino. A stop gap measure, she said, will be needed because the State has yet to pass a budget of its own for the third year in a row. The State is already “extremely slow” in paying school districts, and the Illinois budget debate will likely drag out over the summer. Education funding reforms are still on the table in Springfield and could reduce District funding by more than $2 million a year, she said. Pension reform legislation is still a “lingering financial threat,” as it remains to be seen if $2 million in pension expenses will be shifted from the State to the District.
On the bright side, the District has an AAA bond rating, so it gets the lowest interest rate when borrowing. Moody’s “has had positive things to say about how the District overcame State concerns” and has said District 202 is in a “healthy financial position,” said Ms. Rodino. The cloud of Cook County’s financial position however, raises some questions for the spring 2018 bond rating.
As for revenues, the District is using conservative estimates, said Ms. Rodino. General State Aid is estimated to be flat at best. The District will likely receive a slight increase in Title 1 and 2 funding due to higher numbers of children served. Property taxes, which make up about 85% of funding, are assumed to be frozen.
Taking all this into account, the District did not feel the need to increase student fees for the 2017-18 school year. There was a small increase for summer school, and parking fees were increased last year, but no fees will increase next school year.
Ms. Rodino gave “kudos” to the Human Resources department for helping to keep insurance costs flat over the last few years. Some districts have seen double digit increases, she said. Transportation costs have also been reduced, helping to keep expenses down.
The District’s principle of using value-based budgeting keeps instruction as a top priority, allowing Evanston Township High School to avoid teacher layoffs and maintain a “reasonable” student-teacher ratio, Ms. Rodino said. A reduction of $200,000 in non-personnel related expenses will, however, require some belt tightening. Contractual services for consultants, staff travel and professional development will continue to stay at “low levels” and spending on office supplies and copying for all departments will continue to be at “reduced levels.”
Board Member Jonathan Baum asked about the District’s “Plan B” should expenses increase or funding decrease from the State. Superintendent Eric Witherspoon responded that cash reserves would be adequate to “get through” the next school year, but cuts would be necessary for the 2018-19 school year to maintain a balanced budget. “We’d have some notice so we could plan,” said Ms. Rodino.
Moving forward, a public budget hearing will be held on Sept. 11, at which time any adjustments for the budget will be included.
The complete tentative budget can be found on the District’s website.