The Examiner U-46 News FeedTentative U-46 budget hikes taxes, spending By Seth Hancock
The trend of spending increases and operational expansions despite continued enrollment declines and lack of academic results is expected to continue in School District U-46 as the tentative Fiscal Year 2020 budget was presented to the Board of Education on Monday, June 17.
The budget sets increasing spending by $21.6 million or 3.9 percent ($558.1 million to $579.7 million) and revenue by $19.9 million or 3.6 percent ($561.1 million to $581 million).
It is a larger budget than what the district planned for less than a year ago in its FY2019 budget projections which forecasted for FY2020 expenditures at $559.1, a $1 million increase, and revenues at $564.3 million, a $3.2 million increase.
The district plans for salaries to increase by $12.9 million ($287.9 to $300.8) which is $4.3 million higher than what was projected in the FY2019 budget. The district also plans to continue to add more staff as Dale Burnidge, director of financial operations, said U-46 “estimated an increase in about 54 new teaching positions.”
All revenue sources are expected to rise including taxes by $3.1 million ($303.8 million to $306.9 million), other local sources by $5.8 million ($19.7 million to $25.5 million), the state’s so-called “evidence-based” funding formula by $8.5 million ($174.5 million to $183 million), state categorical payments by $1.9 million ($24.9 million to $26.8 million) and federal funding by $600,000 ($38.1 million to $38.7 million).
On the expenditure side, the district expects increases of $4.9 million ($31.7 million to $36.6 million) for supplies and materials, $3.9 million ($101.4 million to $105.3 million) for benefits and $2.3 million ($38.4 million to $40.7 million) for capital outlay. The district expects a decrease of $2 million ($61.8 million to $59.8 million) in other spending and $400,000 ($36.9 million to $36.5 million) in purchased services.
A finance committee meeting will be held on Aug. 12, the same evening the final budget is expected to be presented. The board will vote on the budget in September.
For revenue assumptions, the district plans to continue to increase the property tax levy by the maximum amount allowed under the law at 1.9 percent while expecting four categorical payments from the state. The largest revenue by fund is educational (74 percent) and by source is property taxes (53 percent).
According to the district’s property tax extension history, it has risen from $302.5 million in 2013 to $312.7 million in 2018.
Burnidge claimed the district is using conservative assumptions by assuming $5 million in additional funds each year from the “evidence-based” funding formula.
“For this (five-year) forecast, we kind of kept our expectations for increases from the state kind of low,” Burnidge said. “We were only using about $5 million a year from the evidence-based funding going forward.”
Illinois is currently $160.3 billion in debt according to usdebtclock.org, it is ranked the worst in the nation for financial health according to George Mason University’s Mercatus Center’s annual ranking, the population has continued to decline and Gov. J.B. Pritzker recently signed 21 new tax and fee hikes with more being proposed.
On expenditure assumptions, the district plans for annual salary and benefit increases due to the contract as well as hiring additional staff. There’s a plan for additional Chromebook purchases, $7 million to fund facility improvements for career pathways and additional technology purchases.
The largest expenditure by fund is educational (74 percent) and by type is salaries (52 percent).
The district also expects pension reform in the Teachers Retirement System regarding Tier 3 staff to not impact the district in FY2020, but Burnidge said it “will shift some additional costs to the district” in the future.
The educational fund balance is expected to go from $138.9 million to $141.1, the transportation fund balance from $10.5 million to $10.8 million and the operations and maintenance fund balance from $1.6 million to $100,000. The summary of all funds shows a beginning fund balance of $296 million and an ending fund balance of $297.4 million.
Sue Kerr, the board’s president, asked the only question which regarded details on the Tier 3 pensions.
“We really don’t know,” Burnidge said. “People that are currently in Tier 2 could elect to be in Tier 3, and then as far as the percentage of what that would cost that hasn’t been determined yet.”
In the 2018-2019 school year, enrollment declined for the fourth straight year dropping by 633 students to 38,572. U-46 has lost 1,915 total students since 2014’s enrollment of 40,487 but spending has increased nearly $100 million during that time which is over $70 million faster than the rate of inflation according to the Bureau of Labor Statistics inflation calculator.
Using the FY2019 budget projections and ISBE data, if the district’s forecasts are realized there will have been a 13.1 percent drop in enrollment from 2012 to the 2021-22 school year while costs are expected to rise by 36.3 percent over the same period.
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