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District 428 budget has $3.5M operating deficit

Published: Monday, Aug. 4, 2014 11:16 p.m. CDT • Updated: Monday, Aug. 4, 2014 11:18 p.m. CDT

DeKALB – District 428 officials today will give initial approval to a tentative 2015 budget that includes a nearly $3.5 million operating deficit.

But School Board President Tracy Williams cautioned the shortfall in the district's $76 million financial plan is based on the state's unclear financial picture and will likely change in the coming months.

District officials project the state will fund general state aid at 85 percent of its "baseline" level, a decline from last year's 89 percent funding level. If the state cuts the funding, the district will receive around $14.2 million, $620,000 less than it did last school year.

However, Williams said there's a chance the state could maintain funding general state aid at 89 percent. Every percentage point equals about $167,000.

“We anticipate closing that deficit in the coming months,” Williams said. “But based on preliminary information we have gotten, we are being very conservative.”

District officials also don't expect to know until after the November election if the state is going keep its personal income tax rate at 5 percent or allow it to decrease to 3.75 percent in January. Although Gov. Pat Quinn has said extending the income tax increase could allow for a higher rate of state education spending, Williams was skeptical.

“That still doesn't mean the school's going to get any share of that revenue,” Williams said.

Of the district's projected deficit, $1.1 million is from one-time expenses associated with school construction projects funded by a $21 million construction grant, according to information from Andrea Gorla, the district's assistant superintendent of business and finance. Those costs show as a deficit because the district received the money in previous years.

The construction costs include renovating Tyler Elementary School, creating an early childhood education center at Huntley Middle School and launching a pilot technology program at Lincoln Elementary School and in eighth-grade classrooms.

If the state fully funded state aid, it would close the district's remaining $2.4 million budget gap, school officials say.

In total, District 428's initial budget includes $73.3 million in operating revenue and $76.7 million in operating expenditures.

On the expenditure side, the budget allows for the district to hire five additional full-time employees. So far, the district has hired a full-time elementary social worker, a full time elementary psychologist, a full-time kindergarten teacher and a part-time middle school counselor. Also, district officials still are in contract negotiations with the union representing their teaching assistants.

At the end of the 2015 budget year, the district should have $20 million – or 26 percent of its expenditures – in reserve. This includes the district's construction grant dollars.

School board members will adopt the budget after a public hearing in September.

If you go:What: DeKalb School Board meetingWhen: 7 p.m. todayWhere: District 428 Education Center, 901 S. Fourth St.

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