The State of Illinois is cutting funding for schools. Governor Pat Quinn signed the budget bill which reduces the amount districts receive per pupil. For the Rock Island-Milan School District the cuts mean a bigger budget deficit.
When school district officials worked on the budget earlier this year, they estimated a $4.6-million deficit. The school board voted to make several cuts and take $2.1-million from reserves. However, with the state cutting per pupil funding, the district is short another $1.8-million. The deficit means the district will have to take $3.9-million from cash reserves.
"We're fortunate we still have some reserves left, but they're going very rapidly," says Rock Island-Milan Schools Superintendent Dr. Mike Oberhaus.
By using reserves to get back into the black, the district will be left with $17-million in cash. The district needs $15-million to stay solvent and if they go under $15-million, short term borrowing will be necessary.
"We are at a critical juncture when it comes to cash flow purposes if things don't improve at the state level," says Rock Island-Milan Schools CFO Bob Beckwith.
The state is supposed to give Rock Island-Milan Schools $6119 for each student. When district officials worked on the budget in spring they estimated receiving $5815. Instead, the state is offering $5445, which is why this budget deficit grew.
"We hope between now and next year the state will right its financial ship," adds Dr. Oberhaus, "Then we'll be able to fund education at the levels it should be funded at and we'll be able to mitigate some of the losses in revenue from the last 3-years."
The district can't make cuts to help balance the budget, because 85% of the district's money goes to personnel expenses.
"Under Illinois statutes we are required to notify people if we aren't going to employ them for the following year at least 45-days prior to the end of the year," says Dr. Oberhaus.
When budget talks start for the 2013-2014 school year, the $3.9-million taken from reserves will be taken into account. However, that's not the only problem the district is facing, if pension reform goes through, Rock Island-Milan schools will be short another $3-million.
"If pension reform pushes costs back to the local districts, it will absolutely have a negative impact on our bottom line and force us to rethink how we do our business," adds Dr. Oberhaus.
To balance the budget Rock Island-Milan schools made cuts back in spring. 16 teachers, several library para-professionals and a number of custodians were let go. Also, class sizes will increase by 2 students.
