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The District 202 School Board passed an $84.3 million budget for FY 2018 at their Sept. 11 meeting. This is a 1.3% increase from FY 2017 and contains an operating budget of just under $74.5 million, a 2.9% increase over the FY 2017 Operating Budget. The unanimous vote came after no public comments at the required budget hearing held during the meeting.
District CFO Mary Rodino presented the final budget to the Board, saying “a few items are now better known” since the tentative budget was passed in June. The State of Illinois finally passed a budget in July after three years, and a school funding bill (SB1947, now Public Act 100-0465) took effect on Aug. 31 that includes a change in the funding formula.
The new funding law also includes a hold harmless provision so Districts will not initially lose money, said Ms. Rodino. General State Aid is now combined with certain state categoricals under the new Evidence-Based Funding (EBF) formula. Combined EBF numbers have been issued, and three of the 22 annual payments have been vouchered by the State but not yet paid out.
Nothing has been mentioned recently regarding possible property tax freezes or pension shifts, but neither is “off the table.” The district has received three of four categorical payments due for FY17.
Gretchen Livingston, District 202 Board Member and Chair, Executive Board of ED-RED (a local advocacy group for schools) said that despite some remaining uncertainty, “we’ll be more comfortable until spring” since the veto session is not usually the time to introduce new legislation. She said the new education funding law allows for a local referendum to reduce property taxes, “a terrible provision, highly problematic for school districts” as well as “tiny provisions for mandate relief” that may or may not offer any real savings. A separability clause is also included so if any one provision is declared unconstitutional, the entire bill goes under.
The Consumer Price Index for the 2016 levy is 0.7%, and for the 2017 levy is 2.1%, which is a concern, as is the fact that State and Chicago bond ratings are junk (or near junk) bond status. This could affect Illinois local governments. The good news is that the District’s credit rating remains excellent, and Moody’s issued positive comments in June, said Ms. Rodino.
The final budget contains several changes from the tentative budget, but only in the Education Fund. Those changes amounted to an additional $466,000 in revenues and expenses, the majority of which came from an increase in the Corporate Property Replacement tax and additional revenues from the national E-rate program (rebates for technology purchases).
Expenses and Revenues
Most of the increases in the budget are staff-related, with a 4% increase in salaries due to contracts and the need for more staff for the larger freshman class. The cost of benefits also increased by 6.73%. Salaries and benefits account for 75% of total expenditures. The amount spent on supplies, purchased services, and tuition paid to outside sources decreased by 2 to 3% each. Capital outlay decreased 9.31%.
Revenues were estimated conservatively. Federal aid slightly increased as did the corporate property replacement tax. It is the second time in five years that the Equalized Assessed Valuation has increased. There were no increases in student fees except a small increase for summer school. Several areas of nutritional services brought in increased revenue due to a trial program where ETHS provided lunches to local summer camps.
Should a property tax freeze or pension shift go into effect, the District will look at how to reduce expenses. The Values-Based Budgeting process keeps any cuts as far away from the classroom as possible.
Board Member Jonathan Baum said, “Things look a lot better. We dodged a lot of bullets.”
“Things could have been a lot worse,” said Mary Rodino.