Post by title1parent on Jun 24, 2008 6:14:44 GMT -5
Indian Prairie predicts budget deficit for year
Start up costs for kindergarten program cause for shortage
June 24, 2008Recommend
By Tim Waldorf twaldorf@scn1.com
It's early in the planning process, but Indian Prairie School District 204 is already projecting a budget deficit for the 2008-2009 fiscal year.
In the first draft of its coming budget, presented to the District 204 board during its Monday workshop session, the district is projecting $269.34 million in revenue compared to $269.61 million in expenditures. This would leave District 204 with a $3.27 million deficit for the year.
Dave Holm, District 204's assistant superintendent for finance, said the district actually expected that deficit to be $1 million more.
"It was anticipated," he said. "We knew we'd experience it because of all-day kindergarten and the one-year delay (in its funding)."
Holm stressed that the new all-day kindergarten program being launched by the district this fall will not be a long-term drain on the district's operating fund. Rather, the program will actually create an additional revenue stream for the district.
Funding for the program will come from state revenue, with these outstanding start-up costs recovered within three years. So, annually, the district anticipates it will receive an additional $2 million in state funds above the $6 million cost of the program.
"Keep in mind this is very preliminary," Holm said. "We don't know where the state is headed."
Holm said passage of a proposed $408-per-student increase in the foundation level of state education funding would actually balance the district's budget.
"Again, don't hold your breath on that," he said, noting he's building this budget assuming the district will see no real growth in general state aid.
Despite the deficit, the district is projecting a year-end cumulative fund balance of $88.45 million, which equates to 33 percent of its budget. The Illinois State Board of Education encourages districts to maintain balances of at least 25 percent.
However, Holm said this calculation, which is a projected total for June 30, 2009, is artificially inflated because it includes the first payment of property tax revenue the district is slated to receive for the 2009-2010 fiscal year. Without that temporary boost in cash flow, the district's balance would stand at roughly zero dollars.
Ever since residents approved an operating fund tax increase in 2000, the district has anticipated it would have to seek another increase in 2009. Holm said he can now see the district pushing that referendum back as far as 2012.
"We expect we're going to have some deficits before we reach a point where we say, 'OK, we're going to have to run a referendum,'" Holm said. "But that's still a few years away."
For now, District 204 continues to achieve the designation of "Financial Recognition" from the Illinois State Board of Education. This is the highest rating of financial strength a school district can achieve.
The Illinois State Board of Education annually reviews the finances of each school district in the state and then releases its Financial Profile rating for each district. The state's goal is to objectively assess the financial health of all districts. This is the third year that District 204 has achieved the highest financial rating.
Holm will present a second draft of this budget in early August, and a tentative budget for the board to display during its Aug. 25 meeting. A budget hearing will be scheduled for Sept. 22, and a vote to approve the budget will follow that hearing.
Start up costs for kindergarten program cause for shortage
June 24, 2008Recommend
By Tim Waldorf twaldorf@scn1.com
It's early in the planning process, but Indian Prairie School District 204 is already projecting a budget deficit for the 2008-2009 fiscal year.
In the first draft of its coming budget, presented to the District 204 board during its Monday workshop session, the district is projecting $269.34 million in revenue compared to $269.61 million in expenditures. This would leave District 204 with a $3.27 million deficit for the year.
Dave Holm, District 204's assistant superintendent for finance, said the district actually expected that deficit to be $1 million more.
"It was anticipated," he said. "We knew we'd experience it because of all-day kindergarten and the one-year delay (in its funding)."
Holm stressed that the new all-day kindergarten program being launched by the district this fall will not be a long-term drain on the district's operating fund. Rather, the program will actually create an additional revenue stream for the district.
Funding for the program will come from state revenue, with these outstanding start-up costs recovered within three years. So, annually, the district anticipates it will receive an additional $2 million in state funds above the $6 million cost of the program.
"Keep in mind this is very preliminary," Holm said. "We don't know where the state is headed."
Holm said passage of a proposed $408-per-student increase in the foundation level of state education funding would actually balance the district's budget.
"Again, don't hold your breath on that," he said, noting he's building this budget assuming the district will see no real growth in general state aid.
Despite the deficit, the district is projecting a year-end cumulative fund balance of $88.45 million, which equates to 33 percent of its budget. The Illinois State Board of Education encourages districts to maintain balances of at least 25 percent.
However, Holm said this calculation, which is a projected total for June 30, 2009, is artificially inflated because it includes the first payment of property tax revenue the district is slated to receive for the 2009-2010 fiscal year. Without that temporary boost in cash flow, the district's balance would stand at roughly zero dollars.
Ever since residents approved an operating fund tax increase in 2000, the district has anticipated it would have to seek another increase in 2009. Holm said he can now see the district pushing that referendum back as far as 2012.
"We expect we're going to have some deficits before we reach a point where we say, 'OK, we're going to have to run a referendum,'" Holm said. "But that's still a few years away."
For now, District 204 continues to achieve the designation of "Financial Recognition" from the Illinois State Board of Education. This is the highest rating of financial strength a school district can achieve.
The Illinois State Board of Education annually reviews the finances of each school district in the state and then releases its Financial Profile rating for each district. The state's goal is to objectively assess the financial health of all districts. This is the third year that District 204 has achieved the highest financial rating.
Holm will present a second draft of this budget in early August, and a tentative budget for the board to display during its Aug. 25 meeting. A budget hearing will be scheduled for Sept. 22, and a vote to approve the budget will follow that hearing.