School budget shows $5.5 million deficit : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
|School budget shows $5.5 million deficit|
|Board votes 5-2 to put budget on public display; hears objections|
|by Lyle R. Rolfe|
A $5.5 million deficit in the proposed 2012-13 Oswego School District budget did not sit well Monday night with a former school board member, Lee Hoffer, and two current school board members, Laurie Pasteris and Brent Lightfoot.
The budget is tentative and will be updated before it is adopted following a public hearing on Sept. 24 by the board.
In a 5-2 vote, board members voted to put the budget on public display for 30 days as required by state law. The budget can be inspected at the District's Administrative Center, 4175 Ill. Route 71, Oswego and the Oswego Public Library at 32 West Jefferson Street in downtown Oswego.
Pasteris and Lightfoot cast the negative ballots on the motion.
The document shows a $5,549,658 deficit in the Education Fund which Dr. Paul O'Malley, assistant superintendent for finances, said is predicted to have only $119,001,165 in revenue and expenses of $124,550,723.
Revenue and expenses for the five remaining funds are balanced, O'Malley said.
The other funds are as follows: Operating and Maintenance totals $14,473,991; Bond and Interest is $34,211,268; Transportation is $9,500,780; Illinois Municipal Retirement Fund is $4,150,624; and Working Cash is $23,279.
The total proposed budget revenue is $181,361,006, but the available revenue is only $186,910,665, leaving the deficit.
Hoffer, who served eight years on the board's finance committee during his board tenure, told board members of his disbelief.
"I was absolutely astounded to see that in the Education Fund, you are projecting a deficit of more than $5 million. That's almost five percent of your estimate for the next school year."
Hoffer said the deficit is the largest he has seen in his 31 years as a school district resident.
He called the amount "unheard of" and "unconscionable."
Hoffer said some of the things that caused this deficit were mistakes by the board in listening to the previous administration. They included hiring 46 additional certified staff members at a cost of $3.4 million ($2.8 salaries and $600,000 benefits).
He noted with a total enrollment for this year of 17,561 the increase of 384 was at the low end of the 300 to 600 increase estimated by the previous administration. He questioned whether they need 46 more teachers for these additional students.
Hoffer said the district also may be on the hook for paying the state's portion of the Teachers Retirement System (TRS) pension benefits, depending on what state legislators decide.
"You really need to go back and take another look. I really don't think the public is going to stand for another large tax increase which in the last two years they have had. And right now there is a (advisory) referendum petition filed asking for a 20 percent reduction in the rates. I know that's unrealistic.
"But it does give you an indication that there's a large percentage of the populations out there that doesn't want to see more money spent. And when you come up with a $5.5 million deficit I think that's unacceptable," he said.
Hoffer said the board should send the budget back to the administration.
"When you get to the budget tonight, you should start looking to make expense cuts," he said.
"EAV, (Equalized Assessed Values for property), is going down which means tax rates have to go up so those things have to be considered," he said.
O'Malley noted other assumptions by the board in preparing the budget. He said the General State Aid (GSA), which in the past represented 94 percent of the per student cost, has been lowered by the state to only 89 percent of the per student allocation given in 2011.
He said this cut the district's GSA allocation by $4.1 million.
"We expected to get about $37 million and that has been reduced to somewhere in the range of $33 million. That has a major impact on us going into the next fiscal year," he said, noting that the $4.1 million they will lose could reduce the deficit to about $1.5 million which is easier to deal with.
He noted that the state's categorical grant payments may remain the same but could also be decreased.
However the Corporate Personal Property Tax (CPPT), payments from the state to all districts, is being cut by 14.7 percent.
"I don't know how much it will affect us, but you will see that change in the final budget," he said.
O'Malley said they are guessing that the Consumer Price Index (CPI) will be 2.25 percent next year, but noted that the actual figure will not be known until next January.
"Looking to the future the GSA payments went from 100 percent to 94 to 89. It's pretty clear that it's not going up. The categorical grants are decreasing and the CPPT payments are decreasing.
"The state is looking to shift more of its tax burden onto the local school districts which will make it even more difficult for us to plan for the future," he said.
He said they also have compensated in their figures for taxes that will not be collected next year.
"We know that we do not collect 100 percent of taxes. As a reality we collect about 99.2 to 99.4 percent of the taxes, so we've also compensated for that income loss as well," he said.
"And lastly, hiring 46 certified teachers added $2.8 million to salaries and $600,000 to benefit payments," O'Malley said.
The public hearing on the budget will be held at 7 p.m. Monday Sept. 24 prior to the regular board meeting in the second floor Community Room at Oswego East High School, 1525 Harvey Road, Oswego.