District 52 must make budget cuts in near future

This is the third of three articles explaining the financial situation of Washington Grade School District 52, including Lincoln and Washington middle schools. In the previous articles, I outlined the impact that the state financial crisis is having on D52 and described the current deficit spending in the district. To sum it up, D52 is spending more money than it takes in — about $750,000 more per year. But the district has an ample fund balance. i.e. savings, for the short term — about $5.2 million. To further compound the situation, the State of Illinois is sending a clear message that all Illinois schools could lose significant state revenue over the next two years — about $700,000 for D52. This shortfall will further reduce our savings.

The purpose of this article is to outline a plan to achieve a balanced budget. But before I go on, let me say once again that D52 is not in a financial crisis today. My purpose is to inform the board of education, D52 staff and the public so that we may act prudently now to avoid a crisis in the future. In short, how do we solve this financial issue and continue to maintain the excellent service to students and the community?

The board of education finance committee has recommended three goals to the board:

• reduce expenses to achieve a balanced budget in three years;

• for the short term, use fund balances to cover deficits or any state revenue losses; and

• make corresponding expenditure reductions for any new ongoing expenditures.

The board reviewed these goals at the January meeting, expressed support for the goals, and asked that the goals be placed in the development of the strategic plan.

To achieve a balanced budget in the next three years, a reduction in some of the district expenses will obviously be required. To determine what expenses should be reduced takes careful analysis and input from the public, staff and administration. 

First, the district will identify areas that could become more efficient. This could be supply, material, program and other district activity costs that we can cut without sacrificing support to students. Realistically, there will not be enough savings from this action to cover needed reductions. District administration will then examine potential program cuts, including the reduction of positions, hopefully with attrition through retirements. Most importantly, the school district will strive to maintain the highest level of education for students as is financially possible.

Second, since this is a three-year process, it will not be necessary to make all of the reductions in one year. Reductions will be spread out over the three-year period. After each year, progress can be assessed and a revised plan developed. D52 has some fund balances to absorb the continued deficit spending in the short term. Also, state revenue is a “wild card” in this process, and fund balances can cover losses incurred — again — for the short term. However, at the end of the third year, it will be necessary to have a balanced budget so that the deficit spending does not continue. 

Finally, for any new ongoing expenses that occur, the district must have a corresponding reduction in expenses. This is because adding ongoing expenses will only accelerate the deficit spending.
Therefore, the only way to control any increase in ongoing expenses is to reduce an existing cost in the same amount as the new expense.

Over the next several months, the school district will be closely re-examining district finances and set priorities in an effort to determine what steps must be taken to reach these goals. During this time, the board will seek input from the community, staff and administration as it strives to continue to deliver an excellent education for our students. 

For further information, the district will be hosting two public forums in the near future. Also, on the district’s Web site, under the superintendent’s presentations, is more information about each of the issues discussed in the articles.

Feel free to comment directly to me at: jtignor@d52schools.com.

Working Together/Achieving Excellence,
John Tignor, Ed.D.
Superintendent
Washington GSD 52