District 202 could end the 2017-18 school year with an operating deficit of about $9 million because of escalating costs and declining revenues, according to the proposed 2017-18 budget.
District officials plan to use budget reserves to offset the deficit, but the district could still face budget woes because of a new threat to state education funding.
The Plainfield District 202 Board of Education received the proposed 2017-18 budget at its July 17, 2017 regular meeting and approved putting it on 30-day public display as required by law. The proposed budget and related information is posted on the front page of the District 202 website (www.psd202.org)
The Board plans to hold a public hearing on the proposed budget at 6:30 p.m. Monday, August 21, 2017 and vote on the document at its regular meeting that same night. The Board meeting will be held at the District 202 Administrative Center, 15732 Howard Street, Plainfield.
STATE ISSUES LINGER
The state Legislature finally passed a budget in early July after more than two years of delay. However, local school districts are not out of the woods yet.
The new state budget – and state education funding – is tied to a new education funding model that Governor Rauner has vowed to veto.
“Once again school districts find themselves being held hostage to state politics,” said Superintendent of Schools Dr. Lane Abrell.
“We have worked and made hard decisions locally to provide a solid, comprehensive educational program to our students and to be good stewards of our community’s resources,” Abrell said.
District 202 endured four years of fiscal austerity and significant budget cuts made to counter the ongoing effects of a weakened economy and 10 years of unprecedented growth.
From 2009-2012, District 202 cut about $42 million in operating expenses, mostly by eliminating about 345 full-time teaching, support staff and administrative positions.
“Yet we will start another school year unsure of our financial status because of something beyond our control,” he said.
However, school will open on August 17 and operate as planned despite the state’s problems, Abrell emphasized.
If necessary, he said, District 202 will sell tax anticipation warrants or borrow money through other means to keep the doors open next spring, as it did for several years during the district’s heavy growth period and the recession.
Tax anticipation warrants are effectively short-term loans, paid back with eventual tax proceeds.
“So our local taxpayers would have to pay interest on short-term loans which is less money that we can spend on kids and classrooms,” Abrell said.
GENERAL BUDGET DETAILS
District 202’s total projected 2017-18 budget, including debt service and capital projects is $302 million, up from $290.7 million last year. Total revenues are expected to be $286.5 million in 2017-18, down from $292.2 million last fiscal year.
Of that figure, the proposed 2017-18 District 202 Operating Budget shows $252,294,055 in expected expenses and anticipated revenues of $243,027,868, resulting in a $9.3 million projected operating budget deficit.
The Operating Budget pays for all daily operating expenses including salaries and benefits, which comprise about 79 percent of the Operating Budget this year.
PLEASE NOTE: The State of Illinois defines the “Operating Budget” as the Education, Operations and Maintenance, Transportation and Working Cash funds for purposes of assessing and rating school districts’ financial health.
PROJECTED OPERATING REVENUE DOWN
District 202 will “prorate” state funding at 92 percent of reimbursable expenses for the fourth straight year to hedge against the state cutting funding later.
“Prorating” is the practice of budgeting general state aid at less than what the state actually owes local school districts or even what is telling districts to expect just in case the state once again reduces funding. The state is supposedly planning to provide 100 percent of general state aid funding.
2017-18 anticipated operating revenues are down about $13 million from the 2016-17 (unaudited) budget, which showed $256,053,899 million in revenues.
The drop reflects declining overall general state aid due to decreasing enrollments and increasing equalized assessed property values; and budgeting for only two mandated state categorical payments.
Mandated categorical funds pay for transportation and special education. The district normally gets four mandated categorical payments. Altogether, the district expects to lose about $15 million in state funding this fiscal year.
PROJECTED OPERATING EXPENSES UP
Projected 2017-18 operating expenses are up about $10.8 million or about 4 percent over the 2016-17 (unaudited) budget, which included about $241,476,599 million in expenses. Most of the increase is due to salaries and benefits.
The tentative proposed 2017-18 budget essentially maintains staffing, service and building budgets at current levels.
It does not include funding for any major new initiatives, programs or capital expenses.
Administrative salaries are expected to increase 2.5 percent. Non-union support staff salaries are expected to increase 2.25 percent.
The proposed budget also includes funds for a salary increase for teachers. Teacher contract negotiations are continuing this summer.
The proposed tentative budget also includes a $1 million contingency for building-specific enrollment changes and special education needs, as has been done the last several years. It also reflects an 8 percent increase in health care costs.