Post by title1parent on Feb 3, 2009 6:25:27 GMT -5
www.suburbanchicagonews.com/beaconnews/news/1409927,2_1_AU03_SKLCUTS_S1.article
Slumping housing, revenue outlooks press Kaneland
February 3, 2009
By LINDA GIRARDI For The Beacon News
Beyond initial cuts in supplies, field trips and staff development, the Kaneland School District is looking at $1 million in budget reductions for the next fiscal year.
The stagnant housing market, delayed state payments and the low Consumer Price Index for the 2010-2011 fiscal year have posed several revenue challenges, district officials said.
"We don't have very much control over revenues, but we certainly have control over our expenditures," school business official Julie-Ann Fuchs said. "We want to be proactive and don't want to ... find ourselves in a position where we need to cut 10 percent and now we are looking at a lot of pain for the organization.
"We need to figure out where we will find about $1 million."
The administration began working with PMA Financial Network in developing a financial planning program that can be instantly updated to help them make "informed, data-driven decisions" relating to district finances, from budget planning and trend analysis to scenario analysis.
PMA financial adviser Michael Frances said the firm developed the program several years ago when they saw a need for a tool to help clients make decisions as far as five years out. PMA assists 140 school districts in the state. Previously, Frances was assistant superintendent of finance in the Oswego School District.
"We utilized this tool in Oswego with the tremendous growth we had in the district," he said, adding it assisted in decisions on such issues as staffing and facilities.
Kaneland and other area schools are limited in the amount of local property tax dollars they can request by the state tax cap. The cap is based on the Consumer Price Index -- or the rate of inflation. Kaneland's 2008 tax levy is based on the 2007 CPI of 4.5 percent, which will drive the taxes the district collects in June and September.
The Bureau of Labor Statistics earlier this month released the CPI for 2008 of 4.4 percent, for the 2009 levy.
"This is really sending all local governments that are tax-capped and relying on property tax (revenues) into a spin. It is basically saying you will get no new revenue," Frances said.
He said the corporate personal property replacement tax -- another source of revenue for districts derived from the Department of Revenue after corporations pay income taxes -- is also down.
"With the economy faltering, we saw for the first time the (corporate tax) figures are down and projected to drop again," he said, adding all other local revenues are projected to increase 0.2 percent over the current budget.
From 2004 to 2007 when housing was moving, Kaneland had between $41 million and $65 million worth of additional assessed value added to the district's equalized assessed valuation, Frances said. The 2008 projection has fallen to $22.4 million.
"With this slowdown and stoppage of any new construction, the number realistically will fall even further and hopefully start to recover," Frances said.
State aid makes up 17 percent of Kaneland's current year budget -- and the district expects no increases in general state aid next year.
District officials trimmed $740,000 from the current fiscal year budget, operating with one middle school and flat-line staff expenses.
Now, they must address how the district can balance revenue with expenditures beginning with next year's budget.
"These assumptions are based on the fact that we are not increasing our level of staff for next year. You will not hear the presentation that you have heard the last couple of years recommending a $700,000 to $800,000 staffing increase," said Jeff Schuler, assistant superintendent of human resources.
Slumping housing, revenue outlooks press Kaneland
February 3, 2009
By LINDA GIRARDI For The Beacon News
Beyond initial cuts in supplies, field trips and staff development, the Kaneland School District is looking at $1 million in budget reductions for the next fiscal year.
The stagnant housing market, delayed state payments and the low Consumer Price Index for the 2010-2011 fiscal year have posed several revenue challenges, district officials said.
"We don't have very much control over revenues, but we certainly have control over our expenditures," school business official Julie-Ann Fuchs said. "We want to be proactive and don't want to ... find ourselves in a position where we need to cut 10 percent and now we are looking at a lot of pain for the organization.
"We need to figure out where we will find about $1 million."
The administration began working with PMA Financial Network in developing a financial planning program that can be instantly updated to help them make "informed, data-driven decisions" relating to district finances, from budget planning and trend analysis to scenario analysis.
PMA financial adviser Michael Frances said the firm developed the program several years ago when they saw a need for a tool to help clients make decisions as far as five years out. PMA assists 140 school districts in the state. Previously, Frances was assistant superintendent of finance in the Oswego School District.
"We utilized this tool in Oswego with the tremendous growth we had in the district," he said, adding it assisted in decisions on such issues as staffing and facilities.
Kaneland and other area schools are limited in the amount of local property tax dollars they can request by the state tax cap. The cap is based on the Consumer Price Index -- or the rate of inflation. Kaneland's 2008 tax levy is based on the 2007 CPI of 4.5 percent, which will drive the taxes the district collects in June and September.
The Bureau of Labor Statistics earlier this month released the CPI for 2008 of 4.4 percent, for the 2009 levy.
"This is really sending all local governments that are tax-capped and relying on property tax (revenues) into a spin. It is basically saying you will get no new revenue," Frances said.
He said the corporate personal property replacement tax -- another source of revenue for districts derived from the Department of Revenue after corporations pay income taxes -- is also down.
"With the economy faltering, we saw for the first time the (corporate tax) figures are down and projected to drop again," he said, adding all other local revenues are projected to increase 0.2 percent over the current budget.
From 2004 to 2007 when housing was moving, Kaneland had between $41 million and $65 million worth of additional assessed value added to the district's equalized assessed valuation, Frances said. The 2008 projection has fallen to $22.4 million.
"With this slowdown and stoppage of any new construction, the number realistically will fall even further and hopefully start to recover," Frances said.
State aid makes up 17 percent of Kaneland's current year budget -- and the district expects no increases in general state aid next year.
District officials trimmed $740,000 from the current fiscal year budget, operating with one middle school and flat-line staff expenses.
Now, they must address how the district can balance revenue with expenditures beginning with next year's budget.
"These assumptions are based on the fact that we are not increasing our level of staff for next year. You will not hear the presentation that you have heard the last couple of years recommending a $700,000 to $800,000 staffing increase," said Jeff Schuler, assistant superintendent of human resources.