District 73.5 Deficit Budget Reflects Tough Times (IL)
August 10, 2010
Skokie School District 73.5 officials are hardly surprised that their $15.5 million tentative budget projects the district’s first spending deficit since its successful tax hike referendum in 2004.
Factors confronting this school district and many others like it fall under the category of "unprecedented" by many educators’ standards.
The district is owed a healthy amount of aid yet to be paid by the state; The Cook County property tax cap this budget cycle will limit revenue because of an all-time low consumer price index of 0.1 percent; the sour economy and slumping housing market will reduce crucial property tax revenue from new growth, which is excluded from the cap; and corporate tax appeals, while projected to be down from previous years, are still likely to make an impact.
District 73.5’s projected revenue for 2010-11 is set at under $14.9 million, leaving a deficit of about $700,000 including district debt. In the education fund, where day-to-day spending occurs, expenses are listed at under $12.3 million and revenue at just over $12 million leaving a deficit in excess of $245,000.
District officials in 2009-10 knew that a difficult year was ahead of them and made a series of cost-saving actions. Most of those measures and some new ones are part of the recipe this year, but the leaner budget isn’t enough to balance revenue and spending.
District revenue is projected to drop by 6.7 percent from last year while overall budgeted spending is slated for a 3.8 percent hike. The education fund, always the key fund to keep an eye on, shows an increase in spending by 3.3 percent mostly due to salaries. Revenue in the same fund is projected to drop by 5.3 percent.
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"If we could count on the state revenue that is owed to us, we would have a balanced budget," said Business Manager Cyndi Cohen. "If that revenue comes through, and we don’t know when or if it will, it will change our situation."
And the situations of many school districts and other institutions, which are also owed Illinois funds, but have not been paid because of the state’s financial crisis.
For programs that already were held in 2009-10, the state owes District 73.5 about $438,927, officials said. The 2010-11 budget reflects a nearly 40 percent decrease in state funding from last year — although what the state will be able to chip in for remains murky for all school districts.
The state is not expected to fund previous grants of about $180,000, and state reimbursement for special education and transportation programs are expected to drop by 20 percent.
District 73.5 this year is also budgeting $810,000 for a new roof at Middleton School, which is expected to be completed by the start of the school year.
For the first time in memory, the School Board a few months ago asked the teachers’ union at District 73.5 to renegotiate wages for the coming year. Teachers in 2010-11 are scheduled to receive an average 5.2 percent salary increase including wage scale "step increases."
Administrators and non-unionized staff will be paid reduced raises of an average of 1.6 percent, Cohen said.
While the union turned down the district’s request, Board President Jim McNelis said, it came back to the Board with some sound cost-cutting suggestions, many of which are implemented in the budget.
The teachers’ union and the district in 2010-11 are in the final year of a contract so negotiations over a new pact will be ongoing during the school year. "It will probably be one of the toughest negotiations we’ve had because of the economy," McNelis said.
Last year, District 73.5 cut 79 percent from its technology budget and will continue with the same budget this year, Cohen said.
It will educate four or five additional special education students inside the district rather than sending them to the Niles Township Department of Special Education, which also will result in savings.
The district next year will reduce staff development programs, which will only be funded through outside grants, Cohen said. The savings are estimated at $18,500. The district will not purchase any library books as it usually does every year, an estimated savings of $10,500.
By cutting back on building equipment purchases, the district expects to save another $51,000. The district will reduce curriculum planning for next year, which will save more spending.
"We were looking to make cuts in any way we could that would not directly impact the education of the kids," Cohen said.
In her annual budget letter, Superintendent Kate Donegan laid out the difficult situation confronting District 73.5.
"Many factors continue to have a negative impact on the financial resources of the district," she said. Her list included the tax cap, tax revenue refunds, a decrease in state funding and an increase in special education costs and a spike in the cost of medical and dental insurance.
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"In addition, due to the downturn in the economy," she said, "we are experiencing a decrease in tax collections and interest earnings. It is our intent to continue to spend responsibly while seeking out long-term solutions to the issues that adversely affected the financial resources of our district."
Some funds in the 2010-11 budget other than education include operations and maintenance where spending is projected at $1.3 million and revenue at $1.7 million; capital projects where spending is projected at $770,000; and transportation where spending is projected at $595,591 and revenue at $634,000.
The tentative budget is currently on display at District 73.5, 8000 East Prairie Road and on the district’s website at www.sd735.org. The budget will be presented for a public hearing and then a final vote at 7 p.m. Sept. 14 at Elizabeth Meyer School, 8100 Tripp Ave.