U-46 expects to lose millions but still plans to spend more

The odds of the state making full payments to school districts appear slim. The loss of those payments will likely cost Elgin Area School District U-46 millions of dollars in the upcoming financial year, while changes to legislation add to uncertainty in the district’s tentative budget.

Dale Burnidge, the director of financial operations who presented the tentative budget Monday, said the district estimates revenues at $477.3 million, a loss of $10 million compared to the previous year, while expenditures are tentatively budgeted at $490.6 million, an increase of $14.3 million over 2011.

“This is the first pass of looking at the budget,” Burnidge said. “There are a number of unknown factors related to funding.”

Although the host of unknowns will affect the final budget in September, the district expects to receive three out of four categorical payments from the state, resulting in a revenue loss of about $9 million. Categorical payments are for programs including special education and early childhood education. General state aid, which helps school districts cover operational costs, is also expected to be reduced by 5 percent. That reduction will take about $3 million from the district.

Changes to the states property tax law could cost the district as much as $7 million if districts are unable to capture the increase related to the consumer price index when property values decrease.

In addition, Burnidge said, the district would not receive revenue from bond issuances.

The district, however, will increase revenues by $20 million through property taxes due to new construction and inflation.

As for expenditures, Burnidge said the district added 15 teaching positions for the Early Childhood Program and increased the budget for capital programs by $4.3 million to $12.6 million.

The final budget will be presented to the board in August with approval in September.