Some school districts generating surpluses

While most suburban school districts continue to struggle with a weak economy and unreliable state funding, a few have combined strong local tax bases with frugal spending to generate annual surpluses even before their state and federal funding arrives.

Districts at the top of that list describe their approach to aggressive budgeting as a culture that permeates the thinking of not only board members and administrators, but teachers, parents and other community members.

“We don't go on a spending spree just because the money is there,” said Yasmine Dada, assistant superintendent for business of Libertyville-Vernon Hills Area High School District 128.

District 128 topped the list of area schools that remain flush even in a bad economy, ending the 2008-09 school year with a surplus of nearly $4.3 million.

While the most recent data available is from 2008-09, the districts remain in the black, even as financial challenges increase, officials say.

For instance, though Des Plaines Elementary District 62 has a good mix of businesses and homes in its property tax base, more businesses are appealing their assessments and more homes are being foreclosed, affecting the collection rate, Assistant Superintendent for Business Services Nelson Gray said.

But District 62 and the other area school systems that top the list of surpluses share a number of common factors. They cite good relationships with their unions based on mutual respect and realistic expectations, and they all passed tax-hike referendums during the past decade.

And while many of their peers are forced to cut programs and lay off teachers, some of these districts are using their financial strength — along with additional revenue sources like grants — to improve and expand educational programs.

District 128 is adding Mandarin Chinese to its foreign language curriculum. And District 62 is expanding students' use of interactive technology through the creation of Technology-Integrated Learning Environment classrooms, which use interactive technology — like electronic whiteboards — in the learning process.

While some school districts blame the fiscal times for painful cuts, leaders at financially stronger ones like Kildeer-Countryside District 96 say they have never thought in terms of cuts, but of building a budget from scratch each year, Assistant Superintendent for Business Jonathan Hitcho said.

Staffing levels are looked at afresh based on student population; pay raises are directly tied to the rate of inflation; and programs are strategically abandoned and replaced as they become outdated, Hitcho said.

Dada said a similar philosophy is employed in District 128.

“Don't look at what you've always gotten but at what you need,” she said.

So, could most school districts use the same conservative approaches to budgeting?

Officials from these surplus-generating districts largely believe so, but said there would be new and different challenges in starting today rather than having been already prepared for it.

Paul Dart, Carol Stream Elementary School District 93's assistant superintendent for business for the past 30 years, said his five-year financial projections helped the district time its tax-hike referendum before the economic crisis. It would be much more difficult for another school district to follow that route now, he said.

“It's going to be tough, because you couldn't pass a referendum today,” Dart said.

As aggressive as a district may be in its budgeting, the strength of one's local tax base is largely a function of good luck or bad, Hitcho added.

“Seventy-five percent of our revenue is local taxes,” he said. “For those who get 75 percent of their revenue from state and federal funding, it's a different story.”

Lengthy, lucrative labor contracts can also constrain a district's ability to adapt to new, harsher economic realities, Dada said. When 80 percent of a district's revenues are tied up in salaries and contracts, there's little room left for new demands and unfunded mandates, she said.

But even surplus-generating districts are not unworried by the economy. Constant vigilance and adaptation are what keep them in the position they're in, officials said.

To that end, officials say, whatever additional funding they are now receiving from state and federal sources is being saved as the financial burden on districts continues to grow.

“Ultimately, we're not going to be immune to it,” Hitcho said.