Tough economic times lie ahead for District 150
District 150 Superintendent Ken Hinton smiled as the question was asked.
Hinton and District 150 Treasurer Guy Cahill had just outlined serious financial perils facing District 150. They had just told the media on Monday afternoon that the district has gone from an anticipated $200,000 budget surplus to a deficit for the ‘08-’09 fiscal year that could hit $2.8 million.
Yet, Hinton said he was optimistic.
“Why?” he was asked.
“I just have a lot of faith,” Hinton said.
But, it is going to take much more than faith to steer District 150 toward a sound fiscal future.
Cahill said a floundering economy, less anticipated state aid and dropping local property values threaten the district’s financial security. Cahill and Hinton both said ways to slash the budget without impacting student achievement would have to be sought.
But, options are limited. Hinton said there are no creative solutions floating around because of the voluminous state and federal rules that govern schools.
“We are also constrained because of contracts,” Hinton said.
Hinton and Cahill said primary funding sources for schools are drying up. They anticipate a loss corporate tax funds, state aid and property tax revenues.
Regarding property tax revenues Cahill said the historic average for growth in equalized assessed valuation has been 3.3 percent. It is expected that growth will decline to 2.8 percent.
And, Cahill said, what the state will do regarding state aid, at a time the governor is asking state agencies to make 8 percent cuts across the board, is any one’s guess.
Cahill said the district fears the state will remain behind in state aid payments and not make up what is owed. Cahill said at the end of October the state was already $1 million in arrears to District 150.
And, the general economic forecast does not get better in the immediate future.
“Going forward we see revenue dipping before growing again,” Cahill said. “Unfortunately expenditures will continue to grow.”
Cahill said one of the big challenges for the district is reducing wages and benefits. He said the school district has gotten wages and benefits down to 82 percent of the budget. Yet, he said, their peer schools spend only 71 percent of their budget on wages and benefits.
“That’s a problem for us,” Cahill said.
He said the district needs to trim $7 million from the budget on an ongoing basis to approach a semblance of balance.
The school district has about $13 million in reserves. But, Cahill said, just throwing that money at the issue will deplete the district’s reserves in less than two years.
But, Hinton said, efforts to trim the budget will not come at the expense of student achievement.
“Student achievement is first and foremost, and then financial stability,” Hinton said.