Danville school officials expect state funding woes will bring $2.4 million deficit

Tuesday, August 10, 2010

DANVILLE – Danville school officials are projecting that the district will end the current fiscal year about $2.4 million in the red.

"That's even sort of a guess," Superintendent Mark Denman said Friday. "We simply don't know what's going to happen with state funding, which is 51 percent of our revenue."

Denman and Business and Finance Director Heather McKiernan on Wednesday will present the proposed spending plan for the 2010-11 fiscal year to board members, who will vote on whether to put it on display. Board members will vote on whether to adopt the plan at a later date.

The school board will meet at 5:30 p.m. on Wednesday at the Jackson Building, 516 N. Jackson St., Danville. A copy of the agenda is available at http://bit.ly/dBJbx5.

Denman wasn't ready to release preliminary figures for expenditures and revenues on Friday because administrators were still completing the first draft. But McKiernan said the overall total would be "considerably less" than the district's $71 million budget for the 2009-10 fiscal year, which ended June 30.

She also said the education fund – which pays for most salaries and day-to-day expenses – is projecting a $1.5 million deficit.

The state education budget will reduce funding for early childhood education, transportation and other grant programs. While it aims to maintain the per pupil foundation level at $6,119, local officials worry whether the money actually is going to be there.

"We don't have the (federal stimulus) money," McKiernan said, adding the state used that to make some general state aid payments in 2009 and 2010. But that money has since dried up.

"If they run out of money, we've been told (the payments) will be pro-rated at the end of the year," Denman added.

Denman also said the state still owes the district money from the prior fiscal year, and the distrrict has no idea when those payments or this year's payments will come. He said the district received a payment recently, but State Superintendent Chris Koch told him that the state comptroller had to borrow the money to make it.

"He said there's coming a point when Illinois will no longer be able to borrow the money to pay its reimbursements unless there's an adjustment somewhere," Denman said.

Officials said the district's financial outlook could have been worse, if they hadn't taken steps to cut about $5.5 million from the budget earlier this year. This spring, officials cut supplies, travel and other non-salary expenses.

"We've cut everywhere we could possibly cut," McKiernan said.

They also eliminated more than 80 positions. Since then, 17 certified positions and 17 non-certified positions have reinstated.

Denman said administrators on Wednesday could propose reinstating "a handful" of preschool staffers. That would boost overall seating in early-childhood classes to around 140 or 150, which is half the number from last year.

"If the money starts to flow, we could look at starting more rooms later in the year," he said. "Parents are calling. They very much want the service, and we want the service.

"We just don't want to overstep what we can pay for," he continued, adding he can't endanger funding for regular-education programs that must be provided.

Denman said the district must take the same conservative approach with this year's contract negotiations, which have stalled after six long sessions. Both the board and Danville Education Association's negotiating teams have asked a federal mediator to help settle the agreement.

Union officials said that the district insists that all 630 or so members take a one-year wage freeze. While they have offered, in concept, to accept a freeze for members earning more than $54,000 a year, they don't think it's fair for those making less, including teaching assistants who make $12,000.

They also argued that the district is in the best financial shape it's ever been with more than $19 million in its reserves.

On Friday, Denman reiterated that only half of that amount could be used for salaries. He added no one knows how long the state financial crisis will last, and that those reserves could go very quickly.

The board also will hold a special meeting at 7:30 a.m. on Thursday to vote on whether to give Danville High School students who have taken physical education during summer school a waiver for the class during the regular school year.