District 52 Superinendent John Tignor looks at the district’s financial situation in his series of articles as a guest columnist.
Washington Grade School District 52 (Lincoln Grade and Washington Middle schools) has enjoyed many years of financial stability, thanks to the efforts of the previous superintendent and past board members. These individuals made wise and prudent decisions that resulted in many years of balanced budgets and savings for a rainy day. Unfortunately, the rainy day is upon us.
As everyone is painfully aware, the State of Illinois is in stormy financial waters. Current deficits are in the range of $12 billion with outstanding bills six months behind in payment.
School districts are currently experiencing and are projected to experience revenue losses due to the state’s financial instability. The first round of cuts came to Illinois schools in early summer 2009. For D52, the impact was minimal — $30,000. Unfortunately, the state is forecasting that the General State Aid, over 40 percent of our district’s funding ($2 million), will also suffer under cutbacks.
What makes the state aid especially precarious these days is that Illinois has relied on the federal stimulus (American Recovery and Reinvestment – ARRA) to pay some of its state aid. ARRA funds will not be available after this school year. The most recent projections suggest that the state won’t make the last two state aid payments ($200,000 for D52) for this year and will not make five payments ($500,000 for D52) in the next school year. Also, some of our larger categorical revenue sources, special education and transportation, may receive only two of the four payments this year — another D52 potential loss of $200,000.
Fortunately, as mentioned before, the past superintendent and board of education were good managers of district finances; and they had no way of knowing this was coming. Depending on the depth of the projected revenue losses, D52 can ride the financial storm for a short time.
I pulled the following quote from a late summer message to us from the state superintendent:
“Sadly, as the new school year begins and Illinois citizens begin to understand the FY 2010 budget reality, we need to begin preparing legislators as well as all citizens for the catastrophe that lies ahead in FY 2011, when we will need an additional $1 billion to make up for the federal stimulus funds that supported us in FY-2009 — and again in this year’s budget — but will disappear after this fiscal year.”
Wow! The “catastrophe that lies ahead” is exceedingly strong language to come from such a high government official. Obviously, revenue from the state will not be a reliable source of funding in the next few years. Clearly, the state superintendent expects that the financial situation for schools in the future will be very bleak.
To further compound the problem, D52 started deficit spending in the education fund last year. In the 2008-09 school year the deficit was nearly $270,000. This year, 2009-10, we project closer to $750,000. Obviously, something needs to change on the expenditure side as well.
With all of this information, nobody should be overly surprised that D52 will begin a process of budget reductions. Many schools, state agencies and public services will probably be doing much the same thing. We don’t have the option of borrowing from China or printing our own money. We have to live within our means.
D52 is blessed to have a tremendous staff that has done a great job meeting the needs of students. As we approach these tough times, I am confident that the board and staff will find the best way to continue the excellent service to students.
D52 is not in a financial crisis. However, the district must take careful and prudent actions now to avoid future troubles. In coming articles, I will explain in more detail the structure of the current deficit and outline a three-year plan to create a balanced budget.
Feel free to comment directly to me at jtignor@d52schools.com.
Working Together/ Achieving Excellence, John Tignor, Ed.D., superintendent, Washington GSD 52.
Washington, Ill. —
