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District 427 receives five-year financial outlook

Published: Wednesday, Oct. 23, 2013 5:30 a.m. CDT

SYCAMORE – Sycamore School District 427 may still struggle getting sufficient state support in the coming years.

At Tuesday’s board meeting, members received a five-year projection of the district’s financial outlook from Greg Kubitz, senior financial adviser from PMA Financial Network. District officials work with PMA Financial Network annually to determine the potential shape of revenues, expenses and fund balances – or savings – in their budget for the next five years. 

Through the financial planning program process, PMA Financial Network analyzes five years of audited annual financial reports, the current school budget, tax levies, enrollment, staff ratios and other information to make its projections. 

Revenue for the school’s operating budget for the current fiscal year sits at $39.2 million. Fiscal years begin July 1 and end June 30 every year. It’s projected to increase to $44.5 million by fiscal year 2019. 

General state aid, which is the second largest source of revenue for the district besides property tax revenue, is expected to increase slightly but stay relatively flat during that time. Proration for the district is expected to decrease from 89 percent to 82 percent by fiscal 2019. 

“It’s not a pretty picture, it’s similar to what was shown last year,” Kubitz said. “Unfortunately, the district has been dealt a bad hand with the state and the state hasn’t held up its end of the bargain with revenue.” 

General state aid is based on enrollment and available local resources. The current enrollment of 3,798 students is expected to increase and then remain steady during the next five years. Available local resources may continue to decrease. 

While the district’s expenditures are currently at $43.5 million, they are expected to increase to $49.4 million by fiscal 2019. One of the potential causes is the increasing costs of health benefits for district employees.

Kubitz said the ongoing changes to health insurance because of the Affordable Care Act may affect them. 

The deficit for the school’s operating budget is also expected to increase from its current $4.3 million to $4.8 million by fiscal 2019. Kubitz said the good news was the district had healthy fund balances and can sustain these deficits for now. However, if the district continues with deficit spending, it could have negative fund balances by fiscal 2018, he said. 

Board President Jim Dombek said the decreasing support from the state puts a significant burden on taxpayers throughout the district. 

“That’s shifting the burden from income taxes that the state collects to property taxes that we have to collect… [people should] be darn angry about that,” he said. 

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