U-46 board reviews budget amid funding uncertainty
Amid funding uncertainty at the state level, Elgin schools' officials are taking their best guess toward preparing a budget for the 2017-18 school year.
Officials at the state's second-largest school district anticipate spending $517.9 million this school year - $8.9 million more than expected revenues of $509 million. That will draw down reserves, said Dale Burnidge, director of financial operations for Elgin Area School District U-46.
"Across all funds, we have a reduction in the fund balance," Burnidge said. "We are drawing down $12 million out of working cash to fund capital projects."
A $103 million operating fund balance is expected to go down to a $305,000 surplus by the end of the year. Transportation and tort funds are still in the red, but officials are working to reduce the deficit.
Salaries and benefits are the biggest expenses amounting to $367 million, or 71 percent of the total budget, for expenditures.
"We have budgeted a 1.9 percent increase over last year for contractual increases for teachers and staff ... 5 percent increase for health insurance (benefits)," Burnidge said.
Big-ticket expenses include $8.3 million for textbooks, $14.7 million for building and capital projects, and $5.3 million for computer equipment.
Property tax revenue is projected to increase 1 percent for fiscal year 2018. That factors in a projected increase in the property tax levy based on the Consumer Price Index (CPI) and revenue from new properties added to the tax rolls.
The CPI for 2017 is projected to be 1.5 percent. The 2017 tax levy amount will be determined in December.
U-46 typically receives $150 million annually from the state, including general state aid and categorical payments.
This year, officials are anticipating receiving $1.3 million more in general state aid and three quarterly payments of categorical funding - reimbursements for expenses, such as special education, transportation, and early childhood education. Revenues include roughly $38 million in federal grants and reimbursements.
State aid and categorical receipts could change, if lawmakers revise the education funding formula.
On Sunday, the Illinois Senate voted to override Republican Gov. Bruce Rauner's amendatory veto of a bill to reform the school funding formula. Senate Bill 1, a Democratic plan passed by the legislature in May, would make disbursements to schools more equitable, according to proponents.
"It's pretty likely that we will have to do a budget amendment once we know the results of the school funding (bill)," Burnidge said.
Chief Operations Officer Jeff King said the district could survive until January/February - when a $42 million bond payment is due - with cash reserves.
"If there is any likelihood that they do not pass something by October/November, at that point we would probably want to seriously look at where we are spending money," King said. By reducing discretionary spending, U-46 could pay its employees for another month and a half, he added.
Officials said the only positions being filled right now are of classroom teachers and essential staff. Students return to schools Wednesday.
The 2017-18 budget will be on display on the district's website u-46.org. A public hearing is set for Sept. 11 and the school board will vote on adopting the budget on Sept. 25.