District 25 foresees $676,000 deficit next year

Arlington Heights Elementary District 25 is projecting a deficit of $676,000 in the general operating fund for the next school year. And that's if the amount paid for salaries remains the same. A new teachers contract currently is being negotiated.

While Stacey Mallek, assistant superintendent for business, could not predict what type of contract the district and the Arlington Teachers' Association will end up with, she said salary freezes have been put into effect in several local districts. Any increase in salaries would mean more funds coming from the district's reserves for the 2010-11 school year.

The general operating fund's last deficit was in 2005, Mallek said. Unless the economy revives quickly, cuts will have to be made in future years, she said, and most of the budget is in salaries.

The board already made significant cuts for next year. Layoffs, announced in March to meet notice requirements, include eight full-time teachers; five part-time teachers; 40 teaching assistants and one licensed practical nurse. In addition, two full-time teachers were reduced to part time and several part-time teachers lost hours.

Mallek said using financial reserves for the coming school year gives the board and administration a chance to plan ahead and make responsible cuts.

The district's reserves total $53.8 million, which is about 80 percent of the $66.8 million budget. The board traditionally has been comfortable with a 40 percent reserve to cover the first few months of the fiscal year until tax money arrives. However, the word this year is that taxes normally expected in October might not arrive from Cook County until February, said Mallek.

In predicting revenues, Mallek also followed Gov. Patrick Quinn's suggestion that state funding is likely to be reduced. The budget has $1.3 million less in state and federal funds than this fiscal year's budget.

"I do think we're going to lose significant (state) money," she said. "It's just a question of what line items it will come from."

The board will hold a budget hearing Sept. 9 and plans to adopt the budget Sept. 23.

The total budget is down more than 10 percent, with much of the savings due to $5 million less in payments for bond funds.

School districts cannot raise property taxes more than the rate of inflation. The funds due next fall will reflect the almost flat rate of inflation in 2009. In 2011, an increase of 2.7 percent is expected.