Massive School-Spending Cuts May Loom
January 21, 2010
PEORIA — A draft budget for education spending in Illinois for 2010-11 recommends maintaining current levels in general state aid for school districts and near-similar spending in special education and transportation.
But what education officials from the state level to the local level are preparing for is the possibility of massive cuts.
About $1 billion from the American Recovery and Reinvestment Act was spent by the state in the last fiscal year as well as the current year just to make state aid payments to schools statewide. That stimulus money, however, runs out this year, meaning the state will have to find $1 billion in funding next year to maintain current spending.
Said Sen. Dave Koehler, D-Peoria: "The state’s budget is in serious condition right now. . . . We will likely have to approve some sort of supplemental bill as it is just to get through the rest of this year. We’re probably looking at a $10 billion to $14 billion deficit when all is said and done. Education is always a high priority, but if the money is not there, it’s going to have to take a cut."
Whether that could mean adjustments ranging from program funding axed at the state level to jobs eliminated at the local level, the state’s ability to maintain current education spending levels is questionable. Coupled with smaller corporate replacement taxes – taxes businesses pay based on sales, which have fallen thanks to the wounded economy – it translates into tough times for schools, especially for those whose budgets already are lean.
"That light at the end of the tunnel isn’t the way out, it’s the train that’s headed straight at us," said Sam Light, superintendent at Illini Bluffs District 327, whose district is spending out of reserves this year to meet expenses. Next year, he predicts much of the same.
With state funding in continual flux, he added: "If we take this significant amount of loss again this year, employees will be affected."
At nearby Limestone Community High School, officials were expecting $458,000 in state aid this year as a "hold harmless" school district. Instead, they’re getting less than $200,000. Already, the district is spending $1 million more than expected revenues.
Included in the education budget submitted to the governor is a call for cutting hold-harmless funding. Hold harmless, which began about 10 years ago, was to ensure that school districts receive at least as much state funding as they did in the 1997-98 school year.
It was intended to help school districts adjust when the state changed the school funding formula, though it never was supposed to be permanent.
Those cuts may be only the beginning.
Many of the educational discretionary programs cited for cuts last year could be targeted again, including early childhood, bilingual education and summer pro grams. A "Grow Your Own" program that helps paraprofessionals and others to become certified teachers already is slated to be cut 44 percent in the proposed budget.
"It’s low-hanging fruit. We were able to get funding restored (for the current year), but it would be naive to think a shot won’t be taken at it again," Peoria District 150 Associate Superintendent Herschel Hannah said of the program.
The district and others likely will be facing much worse.
With the state typically not settling on a budget until summer and leaving superintendents to guess how much they might be receiving, look for record "pink slipping" from financially struggling school districts, many school officials say.
A school district’s biggest expense by far is salaries and benefits of its staff. By law, a school district must notify a teacher whether he or she will be retained prior to March 1.
District 150 could be looking at pink slipping many more than 200 teachers alone, not including noncertified staff, said Norm Durflinger, the interim superintendent.
"When you have no reserves, you have to be prepared to make corresponding cuts to decrease your expenditures," he said.