Rising costs and a projected drop in revenue are leaving District 87 schools with a projected $2 million deficit for the 2019-20 school year.
District 87 Chief Financial and Facilities Officer Colin Manahan will present the proposed $65.6 million budget for the school board at its meeting on Wednesday.
Manahan projects a near $300,000 drop in the property tax base, due in part to the loss of anchor stores at Eastland Mall.
The district has seen about a 1% drop in taxable property over the last two years, Manahan said.
He said revenue is expected to fall $1.5 million and expenses are expected to rise $1.1 million compared to the 2018-19 school year when the district finished with a $637,00 surplus.
“We were conservative on our expenditures, wanting to make sure we meet the budget as best as possible,” Manahan said, adding the district cut technology expenses and trimmed other costs last year to finish in the black.
Manahan said corporate personal property replacement tax revenue jumped 8.2% last year, providing the district an additional $323,000, but he warned that revenue has fluctuated significantly in recent years.
Manahan said the district plans to use working cash funds to cover any deficit and the district has some padding for now.
“We are estimating we have at least several years yet of fund balances should we continue to have deficits of this amount, the $2 million amount, on a year-to-year basis,” Manahan said.
That fund has a balance of about $10 million.
The district expects to see additional funding from the state thanks to the new evidence-based funding model. Mahanan projects the district will get an additional $160,000 to $234,000 from the state, though that won’t make up for the expected loss in property tax revenue.
“We are seeing an increase but then again, that’s offset by a decrease in local property taxes,” he said. “So the net gain is we are essentially flat.”
Manahan said the district is maintaining staff levels this year with no job additions or reductions.
He said the district will see additional costs in the coming years to comply with the state’s $40,000 minimum teacher salary law.
The school board is expected to schedule a public hearing on the proposed budget Sept. 25 and vote on it at that night’s meeting.
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