Districts try to make do with fewer state dollars

Monday, July 12, 2010

BLOOMINGTON — Now that Central Illinois school districts have a better idea of how deep their financial hole is as they anticipate another school year, they’re working on various strategies to climb out. And, it won’t be easy.

The state owed 35 area public school districts $28.7 million on July 1, the beginning of the new fiscal year, according to a Pantagraph survey of school superintendents. That’s almost the same amount Illinois has projected it will dole out in penalties for paying its vendors and suppliers late (within 60 days of a bill being due).

The average amount owed to those districts is $819,189, ranging from about $6.9 million in Unit 5 (enrollment of 12,800), to $69,172 in Kempton-based Tri-Point schools (550 students). See chart below and related link.

“We’re at the point it has impacted instruction,” said Mark Jontry, regional superintendent of schools for DeWitt, Livingston and McLean counties, referring to the late payments.

Districts, almost without exception, have cut staff numbers, myriad instructional programs and “extras” like field trips. Class sizes will increase and, Jontry said, there is a real possibility there will be more cuts, exacerbating an already bad situation.

So the question remains: How do schools meet their obligation to give kids a quality education with dramatically less state funding.

Trimming spending and using reserves are the most common coping strategies, said Jontry and other area educators. Raising taxes is another option, but not one most districts are considering.

Spending less

The predominant theme is ‘restraint,’ said Erik Bush, business manager in Normal-based Unit 5, where school board members have made it clear the budget must be balanced in 2010-11. While they will accept spending some reserves, they also emphasize this is not a one-year challenge, and the district must leave some reserves intact.

Other districts with similar funding hits are budgeting 20 to 30 percent less than what the state says it will pay them in 2011, Jontry said.

The largest district in the area, Unit 5 is counting on only 75 percent of its share from the state, said Bush. Last year, the state paid $25.9 million, or 79 percent of what it owed the district.

The key to trimming 25 percent is prioritizing how the money is spent, said Bush, who has met with school principals and administrators to set those priorities.
Bush estimates Unit 5 will have about 137 fewer teachers when classes restart in August.

The much smaller El Paso-Gridley Unit 11 District remains “very judicious” in its spending, said Superintendent Rick Johnson.

In the last 15 months, the district has cut more than $300,000 by not filling positions when people retire, reducing printing and copying costs, streamlining maintenance/operational expenses, and finding savings in workman’s compensation and property casualty insurance, he said. El Paso-Gridley is owed $695,067 by the state.

Spending reserves

Meanwhile, reserves, painstakingly gathered by many school districts over the years, are dwindling.

“We will be going through our cash reserves more quickly than anticipated,” said Lexington Superintendent Curt Nettles, whose district is owed $1.7 million. In taking that step, Lexington has not cut staff this year, but has delayed and reduced purchasing supplies and materials.

District 87 also has a reserves buffer. But without state payments, that fund is decreasing — and deficits are growing. Bloomington District 87 is still owed almost $2.8 million, or about 30 percent, of what the state owes it.

Superintendent Barry Reilly estimates the district’s $50 million education fund (every district’s largest fund because it pays salaries and benefits) will have an $11.5 million balance starting this fiscal year. That’s down about $1 million from the previous year, largely because of the state funding debacle.

District 87 projected a $1.8 million deficit for the fiscal year that ended June 30. This year, a deficit of $3.5 million is projected, but Reilly thinks both numbers will be a little better than those initial projections.

Working together

With Gov. Pat Quinn’s budget announcement earlier this month, school districts probably can count on the current $6,119 general state aid level per student next year. And, local funding sources — primarily property taxes — while impacted by the recession, remain fairly stable in most of Central Illinois.

Most of the financial pain is in big-ticket items like transportation and special education that schools are obligated to provide — and for which they will receive less state funding to operate.

Getting kids to schools isn’t an option.

There’s the cost of drivers, buses, fuel and insurance. Bush, who has worked in several municipalities, has experience with different purchasing techniques and sees savings potential in volume-buying — perhaps purchasing fuel with other entities such as the Town of Normal, City of Bloomington and District 87 — and balancing current purchases with future contracting.

“It’s price efficiency,” he said.

In the Paxton-Buckley-Loda district, staff agreed to pay higher insurance deductibles to save the district thousands of dollars, said Superintendent Cliff McClure.

To the west in the Deer Creek-Mackinaw district, all staff members, including teachers, are under a pay freeze, said Superintendent Steve Yarnall, noting the move saves the district more than $100,000 along with education stipend reductions that union members accepted. While teachers won’t get a scheduled 3 percent increase, they do get credit for extra education or years of experience and can move up the pay scale.

“The concessions given by the union are tremendous,” said Yarnall, who said the district is owned $560,000 and projects the figure will be similar next year.

Tax increase

What school board members in the Mackinaw-based district didn’t want to do is ask voters for a tax hike. Instead, like many districts, it may increase fees and is considering, among other things, eliminating activity shuttles, bus purchases, field trips, school activities, athletics and bus monitors.

But at least one other area district may have no choice.

Dwight School District 232 has spent its savings, cut staff and trimmed supplies to cope without the $414,376 it is owed by the state. That is almost 10 percent of its annual budget.

“I am fearful of the impact these cuts will have on the quality of education the students of Dwight will receive,” said Superintendent Dale Adams. “With the idea that this situation is going to get worse before it gets better,” he said the school board is considering asking residents to approve a tax rate increase in the education fund.

Biggest shortages

Of the 35 school districts in the Pantagraph area that are owed money from the state, six are short more than $1 million. They are:

School district......................Amount
Normal Unit 5........................$6,911,343
Bloomington District 87..............$2,780,296
Streator Elementary District 44......$1,612,215
Stanford-based Olympia District 16...$1,470,429
Prairie Central Unit 8...............$1,372,739
Clinton District 15..................$1,121,987

In their words

“Like most schools, we have been cutting back a little bit each of the last three years, combining some positions and cutting back on expenses.” - Flanagan-Cornell Superintendent Jerry Farris

“I think what concerns me the most is the fact that our legislators do not seem to feel any sense of emergency with the situation.” - Ridgeview Superintendent Larry Dodds

“So, that leaves you to try to interpret what will happen. In that case schools have to prepare for worst case scenario.” - Tri-Valley Superintendent Curt Simonson

“While we will finish this year in decent shape, District 90 will have to look closely at class size next year and putting some needed building improvements on hold. ... Only time will tell.” - Pontiac Township High School Superintendent Leo Johnson