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District 15's Budget Crisis
September 23, 2010
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A
large budget deficit is forecasted over the next
several years. But the District 15 Board has no plan to fix this problem.
Instead they want to
raise taxes now and balance the budget later.
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District 15 published a
Five-Year Projection dated March 15, 2010, that
shows $55 million of deficits. Over six months later
there is no visible action nor plan by the Board to
address this crisis.
Instead District
15 will be raising taxes if you vote Yes on the
November 2 bond referendum. They're trying to make
you think it isn't a big increase, but this tax
increase is only the tip of the iceberg.
The iceberg is the $55 million
deficit expected over the next five years. The
Board-approved budget deficit for this year is $4.6
million and it grows to a $15.4 million deficit for
the 2014-15 school year.
The chart on the right shows
what's going on. In a nutshell, expenditures are
projected to increase dramatically over the next
several years. But revenues aren't expected to
increase nearly as fast. As a result the District's
cash reserves will dry up quickly. As you can see, the proceeds from
a $27 million bond referendum won't do much to stem
the flow of red ink.
The
blue lines
show what will happen to expenditures and year-end
fund balances if voters reject the bond referendum.
In this case capital projects would be completed at
the rate of about $3.5 million per year. Since other
costs are increasing faster than revenues, the fund
balance next year will
fall below the recommended fund balance that
is shown in red (based on Illinois
State Board of Education recommendations).
The
orange lines
show what will happen if voters approve the $27
million bond referendum and the Board approves the
District 15 Administration proposal to issue $16
million in bonds. Expenditures will increase for two
years as capital projects are accelerated, then
decrease below the blue line as very few capital
projects are done the next two years. After four
years the fund balance will end up about $16 million
higher than it otherwise would. But the fund balance
still falls
below the recommended fund balance
within two years.
The tax increase delays the day of reckoning by less
than a year.
Voting Yes for the bond referendum doesn't solve the
problem. In fact, it makes it worse by pushing the
balanced budget problem down the road. It's easier
to fix a slow leak now rather than a gusher later.
The
District should
first balance the budget
starting with an understanding of what has caused
the large increase in costs.
Then they
should take it
a step further to align the budget with the expected
decline in student populations.
Aligning costs to student populations
plus benchmarking
against other districts
will make the District more efficient, which means
better student education and lower taxes.
Vote No to the bond
referendum in November and
tell the
District 15 Board and
Interim Superintendent Thompson that you want a plan
for a balanced budget without raising taxes.
–
Scott Herr
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