The District 202 School Board approved a tentative operating budget for the 2018-19 school year (FY’19) with both operating revenues and operating expenses pegged at about $76.3 million. This is 2.3% more than  FY’18.

The overall tentative budget which includes both operating expenses and capital expenses, is $85.8 million, 1.8% more than last year.

Operating Revenues

Property taxes, which are subject to tax caps, continue to be about 84% of all operating revenues. “We are still under the grip of tax caps that do not keep up with the increased costs of supplies, energy, services, health benefits and employee compensation,” said Superintendent Eric Witherspoon in a memo to the School Board.

Tax caps limit the  increase in property taxes to the lessor of the increase in the Consumer Price Index or 5%, whichever is less. For FY’19, the increase is capped at 2.1%.

The District is budgeting to receive a combined total of about $4 million in general State aid and categorical State aid for transportation and some bilingual programs. State funding accounts for about 17% of the District’s total operating revenues. Categorical State aid is projected to increase from $494,000 in FY’18, to $1,019,400 next year.

The District is budgeting a 7% increase in Federal aid, or about $3.1 million for FY’19.

The Corporate Personal Property Replacement Tax, which accounts for about 7% of the budget, is still a concern, because of the reduction and potential actions in Springfield. There will be no increase in student fees although summer school fees were raised “a bit,” said Mary Rodino, Chief Financial Officer.

Operating Expenses

Salaries and benefits account for a combined total of 78% of the District’s operating expenses.

Salaries are budgeted to increase by about 2.7% due to employment contracts and the need for more teachers because of increased enrollment, said Ms. Rodino.

Benefits, which include health insurance, are expected to increase by 3.9% next year.

The District is planning to reduce non-personnel costs by about $150,000 from the amount budgeted last year by keeping such items as consultant fees, staff travel and professional development at low levels. Expenses for office supplies and copying for all departments are also being kept at low levels.

Budget Priorities/Comments

The District uses values-based budgeting to improve instruction and maintain a reasonable student-teacher ratio, as two top priorities, said Ms. Rodino. Personnel layoffs are avoided wherever possible, with reductions in expenses achieved by cutting back on contractual services, supplies and materials and by personnel attrition, she said.

Dr. Witherspoon listed 12 strategies which he said were reflected in the budget, including continuing the District’s equity work and addressing racial disparities in achievement, improving the sophomore learning experience by raising academic expectations and honors challenges, and identifying and implementing strategies to address black male achievement and success.

The District’s financial strategies, said Ms. Rodino, are to implement capital projects that reduce operating costs; continue to look at off-campus special-education alternatives; continue to implement employee wellness strategies in an effort to contain health-care costs, and to plan reorganization, based on analysis, as needed.

But, with all this said, the District does have to consider a Plan B or further reductions in expenses if the State reduces revenues or shifts the cost of funding teacher pensions from the State to school districts. Dr. Witherspoon said in his memo to the Board if the State shifts pension costs to school districts, it could add more than $2 million per year to the District’s operating expenses.

In addition, the budget documents say, “A property tax freeze is a very real threat to District revenues.” The District has not estimated the impact of a property tax freeze, but a one-year freeze could reduce revenues by $1.2 million in year one, and carry through to each subsequent year.

To address these possible threats, reductions in personnel would be the “worst case scenario,” Ms. Rodino said.

Board Member Jonathan Baum asked if the new Day School is expected to save the District money. Dr. Witherspoon said the new venture would likely break even, but would enable the District to provide “better services and a better product.”

The tentative budget represents the best estimate of revenue and expenses for next year, Ms. Rodino said. The Board is scheduled to vote on the final budget at its Sept. 10 meeting, at which time staff will present updates or revisions or both. By first approving a Tentative Budget, the Board gave authorization to start the new fiscal year on July 1 “with the basics of a new budget in place,” said Ms. Rodino. It also allows time to obtain tax extension numbers from Cook County that are used to determine the District’s tax levy. The entire Tentative Budget, as unanimously approved by the Board, can be found on the ETHS website.