Deb Philpot
What percentage or responsibility, by the constitution, does the state have in covering educational cost?
I have not recently located an exact percentage in the laws, but the state is legally responsible for helping the schools to maintain a certain level of educational funding. General state aid is the main source for which the state is to help school districts provide an adequate dollar amount to educate students. The level of funding basically depends on the funding formula that is utilized by the state for a given district. It is the responsibility of the state to help fund schools, but it also depends on whether the districts are utilizing a flat grant formula for state aid, an alternate formula, or a foundation formula. Currently, General State Aid accounts for about 58.5% of our district’s education fund revenue, and our state aid is calculated using the “foundation level” formula. The foundation level formula is set based upon what the state determines it should cost to fund a child’s education. This year’s foundation level was $6,119. That is the level that the state brings all districts up to in figuring their state aid formula utilizing the level funding formula. However, if you are residing in a northern school district, as an example Palatine Community Consolidated District, they are in a different situation where 12% of their budget revenue is from state aid. Their spending level per pupil is over $11,000 per pupil, so they make up their revenue differences through their property tax revenues. Their district’s state aid is based upon the alternate formula method. In the overall budget picture, general state aid covers roughly 46.5% of all incoming district revenue (all funds added together). Several factors play into the funding level formula such as a district’s assessed valuation, average daily attendance of the district which is based upon the district’s three best months of daily attendance, poverty count which comes from a three year federal calculated average per district, and other less significant factors. The state is also responsible for paying districts in categorical funds as mandated and in St. Elmo those funds cover roughly 8.5% of the overall budget, but when broken down a large portion of that amount covers 80% of the transportation revenue to be received. There are other smaller grant amounts such as Safety and ADA Block Grant, Reading Improvement Grant, and Textbook Loan Funds that are sent to us by the state, but are based upon their budget and prorated. This year the state textbook fund was cut, Safety and ADA was reduced by 75%. Even though these grants are not huge amounts, they cover things such as textbooks, teacher aide positions, and equipment needs. They are needed funds. However, the state could no longer afford to fund them so now the districts have to pick up those costs.
Has the State of Illinois ever been able to fully meet that required amount?
I believe the state has had years where it has come close to meeting its financial obligations in most areas, but there are a lot of unfunded mandates that the state has set for schools and has never come forward with funds to cover those mandates. I have no research or data to truly answer the question.
What is the amount on average that is met by the State of Illinois?
General state aid has consistently decreased in our overall revenue picture. Our expenditures tend to increase at a higher percentage than what the state’s funding level does. The average will vary amongst districts based upon what districts are spending per student.
How is the shortfall met?
If the state does not come through with the funds that they allocate in their budget, districts must make tough economic decisions as to how to face and recoup those deficits. That often comes in cutting programs, cutting staff, and raising local property taxes.
What is the projected outlook as to when the State of Illinois might begin missing state aid payments?
From the meetings I have attended, I am relatively comfortable that most state aid payments will come for this fiscal year. However, some of those payments will be generated by the use of federal stimulus dollars. If the stimulus dollars do not arrive in time to make our last four payments, there is a possibility that we will be shorted state aid payments. I do not have a number of missing payments nor will the state give out that information. I have heard at various meetings that state aid is a priority, but categorical payments are not. It is my belief that districts will be short-changed on categorical funds and the other state grant funds we receive. That is already showing up as we have not received any regular transportation payments this year for our current fiscal year, and are far behind in receiving various other categorical payments also.
How much will the school district be shorted once the State of Illinois fails to meet payments?
We are to receive 22 state aid payments this year. Each state aid payment for St. Elmo makes up 2.7% of the Education Revenue Budget. I anticipate our budget revenues to be affected by a 6% decrease due to lack of state payments which result in a deficit budget. Another major concern at this time is state funding that supports programs outside of the district that we send students to as well as state funded programs at the pre-k level. We currently have received no Pre-K funds in our district this year. That program is a state initiated program and was to be fully funded by the state. Districts are not to have to pay for those programs. However, the checks are not making to our districts. Our Pre-K grant is a countywide grant, and I have received word that a small portion of funds recently came through to the “home” district, but has not made the flow through process yet. The career and tech ed funds that help to support the area vocational center are not flowing either so our districts will probably end up paying additional tuition in our current year just to finish the current fiscal year program. Again, the state is not supporting the programs as it was budgeted by them. It does absolutely no good for the state to say they are going to fully fund a program if they cannot write the checks to do so. That is what is happening throughout the state.
How will that shortfall affect day to day operations of the district?
For this fiscal year we will continue with everything as it is. We have already put the word out to be extremely conservative, which we normally are anyway, but I have made staff and board aware of financial concerns. My bigger concern is next year. From everything I am hearing in our administrative meetings, the state has used federal stimulus funds to bail themselves out as much as they can. That is what is going to cover some of the state aid payments for this year. Next year there will be no stimulus funds and no new state revenue. It is an election year and our legislators will be fearful to make unpopular proposals, so it will probably be an ugly fiscal year for anyone who relies on state funds. I am not just talking about schools, but hospitals, nursing homes, all state funded government agencies, and public folks who rely on state aid as a means of survival.
Will the district be forced to make educational cuts? (re: not offer high end classes) Will those cuts require a reduction in teacher staff , administrative, or non-certified positions?
I am not at liberty at this time to talk about what the district will do regarding cuts of any positions, but believe there are programs that are state funded that are in jeopardy at this time of surviving statewide. It is truly sad that the state creates programs, says they will fund them at 100%, and then fails to send a check. However, that is what is currently happening.
Does the district estimate the number of teaching positions that might be lost, due to loss in state aid?
I cannot answer that at this point. Our board will be discussing our financial decisions and options at upcoming board meetings, but again I am not ready to share anything publicly. No one wants to cut staff if we can avoid it. However, the state is putting everyone in an extremely bad fiscal situation.
How will those positions be determined?
No answer at this time.
Will class size increase?
At this point in time I do not anticipate any regular classroom sizes to increase.
Has the district made any concessions with the education association to try and save teaching positions? re: salary cap or freeze What has been the associations response to those concessions?
If any district is going to have a good working relationship with its unions, these things are usually discussed, and in Reduction in Force situations, there are legal procedures that the administration has to follow in notifying and working with the union. No answer to the second part of the question.
Provided the concessions were accepted how might that effect the teaching situation?
Not applicable at this point.
Is there a possibility that spring athletics could be cut? How about next Fall?
If so would it be all sports or just certain teams?
I do not anticipate cutting any extra-curricular programs at this point due to our financial situation.
Do you see any possible solution to the State of Illinois financial situation?
I do not manage the state’s budget, nor do I want to. I have opinions where I think there could be savings. I believe there are programs that are funded that aren’t necessary, and still a lot of wasteful spending throughout our state government. I believe the state has to stop borrowing against pension systems to try to make ends meet. Someone will have to pay those debts someday. They have a huge mess and no one in our legislature wants to take the blame or take on the responsibility of voting to make some positive changes with the upcoming elections.
Do you think the State of Illinois will be able to come up with the miracle money to continue to operate?
I can’t answer that. If I were to try, I would say not until after the elections. Then the legislators might have the courage to take necessary action and not worry about their fate at the polls. Do I sound a wee bit negative here? I am. It truly frustrates me that those who we elect to represent us are putting our school districts in these fiscal dilemmas.
Is this isolated or do all districts face the same shortfalls?
All districts across the state are feeling the pain, but probably more downstate schools are feeling it more as we rely heavier on state funding than those in the North do.
How long has the district been planning for this crisis?
Our district is fortunate in that we have been able to build up a good amount of reserves over the years for emergency situations. We will be able to make it over the next few years without borrowing and without making severe cuts, but a lot of our area constituents aren’t that fortunate.
What do you personally think might be the outcome to some of the districts that have not planned for the financial crisis?
Most districts will try to make cuts in various areas. This affects educational programs, services, and activities. In addition, some will borrow to get by if they have the borrowing capacity to do so. They will have to issue tax anticipation warrants, sell bonds, or find a resource for borrowing. There are different types of district reorganization, but that is something districts cannot do overnight.
Could you explain how with State of Illinois woes predicted can the district continue to spend hundreds of thousands of dollars on technical equipment and upgrades?
Our district has not spent hundreds of thousands of dollars on technical equipment, but has purchased a vast amount of technology equipment this year with Title I stimulus funds, IDEA stimulus funds, and Title II funds. All of those funds are federal grant funds that are very restricted in how we spend those funds. We cannot use those funds on normal everyday educational expenditures unfortunately. But, the dollars have been great to add much needed technology into our buildings.
One question that some people will not understand is How can the district afford to put in technical equipment like smart boards and new computers then cut staff?
As mentioned in the previous question, we were given federal stimulus funds this year that could not be used on regular instructional salaries or supplies, but could be used to purchase innovative instructional equipment and technology to enhance educational programs as well as instructional software programs and assessments. These items were greatly needed and probably would not have been purchased in the volume we were able to do so had the stimulus funds not come through. My only fear now is that once these items break down or become antiquated, we will have to build in a schedule and funds to replace what has been purchased. Maybe by then the state will have some new funds – wishful thinking…
Could that money being spent be put into the educational fund?
These funds are placed in the education fund, but since they are grant funds the state and federal government set restrictions on how we can spend it. The stimulus funds basically allowed us to put new and needed technology into our classrooms, but it would have also been nice to put some of it other areas where we could have used it. It could Not be used toward “normal” instructional expenses. We are also allowed to utilize these funds for professional development opportunities for staff as we have initiated programs in our district that require a good deal of training for staff.
What kind of Federal funds and/or State of Illinois, does the district have and how are they used?
The Federal funds that our district receives are No Child Left Behind Grant Funds, which consist of Title I, IIE, IV, and IID. These grant funds have restrictions on how they are spent and all grant applications have to be approved through the state before the funds can be spent. The stimulus funds that we received this year in Title I and IDEA (special needs) were restricted federal funds. We were able to pay for some of our special education staff aide salaries with a portion of the funds, but again were limited in what percentage we could pay for. Our school lunch and breakfast program receives federal funds which accounts for 55% of our school lunch and breakfast program. We also receive REAP (Rural Education) funds from the federal government which is about $16,000 per year to spend on equipment or instructional improvements. We also receive some IDEA (special needs) funds annually to help cover some of our special education costs from the federal government. In the last fiscal year and the current fiscal year, we are having to consider some of our state aid payments as a federal flow thru. This is not a normal situation. With those federal flow through dollars, we are required to do additional reporting and because of the amount of money flowing through it is requiring us to have an additional federal audit which results in additional costs to our district.
Can money be transferred from one fund to another to meet shortfalls?
There are rules that the state set regarding transferring funds and it is allowable depending on which fund you wish to transfer funds to and from. You can also make interfund loans, but those have to be paid back once that fund has a balance that will allow it. It is an administrative and board decision as to whether to transfer or loan from one fund to another as long as the state’s regulations on the process are followed.
On an estimate what is the cost to keep the buildings with heat and electric daily or monthly?
Our heat bills vary from month to month. Our budget figure for all gas bills for the entire fiscal year are set at $85,000 for the entire district. We did not exceed that amount for last year and I do not anticipate going over that amount this year. Our electric bill for the entire district for the entire fiscal year has been set at $65,000. We did not go over that amount for last year and again, I do not anticipate going over that amount for all of this fiscal year.
What is going to be the first priority of the school district?
Our goal is to provide a quality education program for children of all backgrounds and all learning levels and to prepare them for their future, whatever direction they may go whether it be college bound or vocational. Sports and extra-curricular activities help our students to be well-rounded, active, and are a learning experience also. We plan on maintaining all programs as well as our dollars will allow. re:
education, sports, required classes, classes just to meet AYP, high end classes, etc.
How as an administrator do you handle the stress and pressure of knowing you are going to have to release teaching staff?
When I leave the office every day, my work does not stay there, nor do my thoughts about how to improve, maintain, and/or sustain our programs. We just have to try to make ourselves comfortable that we have made our decisions based upon what will be best for the students, and what can we afford to make that happen. The thought of releasing a staff member is extremely hard because you work with these people on a daily basis, you know how much they care for the children, and they somewhat become your work “family”. It is hard, but it is our job, and the state is putting us in some tough situations. It is a stressful situation, but as you gain years of experience in these positions you realize that you are here to make those tough decisions and if you have a good administrative team, board, staff, and community, they will listen and understand, and work with you on getting through the tough times. I have that here in St. Elmo. Also, my family is my rock and when I have had a really rough day, all I have to do is look at my children and I realize that I am so blessed that I can make it through whatever comes my way.
Is there any projections as of yet for next year?
Not at this point. Several of us have asked the state to try to give us some realistic figures for next year so that we know what we are dealing with. It does no good for them to say they are going to fund a program at 90% if the have no dollars to support what they say. I do expect it to be probably one of the worst fiscal situations for our state and schools as far as state support in several decades.
Doug Slover
What percentage or responsibility, by the constitution, does the state
have in covering educational cost?
I do not know of an actual percentage that is required by the constitution, but State’s share of funding has decrease from 48% to below 37%. There are three formulas that are used to figure General State Aid for school districts. The first is “flat grant” formula which is only about 45 of the wealthiest districts, they receive $218 per pupil on their Average Daily Attendance (ADA). Second, the “alternate formula” is used to calculate GSA if available local resources per pupil are between 93 percent and 175 percent of the foundation level ($6,119). This method applies to approximately 140 districts. The main foundation formula distributes GSA to approximately 700 of the state’s school districts. These are districts whose available local resources per pupil are less than 93 percent of the foundation level, which is most of us. Several factors go into the formula for GSA, which includes: Equalized Assessed Valuation (EAV), census low income count, local resources (taxes), average daily attendance three year average, and corporate personal property replacement taxes. This final figures amounts to about 53% of our total revenue for the education fund. The state is also responsible for paying districts in mandated categorical funds of transportation, special education, textbook loan, reading improvement, ADA Block and a few others, which total about 8.4% of overall budget. The transportation reimbursement is well over 85% or transportation revenue.
Has the State of Illinois ever been able to fully meet that required amount? Currently, the State of Illinois owes the Brownstown School District $358,295 as of February 17, 2010. This represents currently represents about 10% of the total budget. So, no the State is not keeping up with their mandated payments to the school district. In past years the state has been better, some payments were received in the next fiscal year but were received. We are unsure about this year.
What is the amount on average that is met by the State?
If the state does not meet the mandated requirements of GSA, categorical funding, and reimbursement then school districts will have deficit budgets for this year. When a school district counts on 80% of their funding coming from State and Federal resources we have very few choices.
How is the shortfall met?
The shortfall for this year will be met with cutting costs as much as possible and money the district has on reserve. Future shortfalls will be handled with cuts in programs, personnel, and supplies.
What is the projected outlook as to when the State might begin missing state aid payments?
Right now I am counting on receiving all 22 of our GSA payments, but for that to happen some of the payments will have to come from federal stimulus money that the state has not received yet. But we are told it will be here. The categorical funding will be a different story, as I am counting on HOPEFULLY receiving 50% of what is due to the district. If the other 50% is made up after the fiscal year we will just have to wait and see. It doesn’t look good though.
How much will the school district be shorted once the State fails to meet payments?
Each district receives 22 general state aid payments, so each payment is 2.7% of our GSA revenue. If we miss two payments that will mean our GSA will be reduced by 5.4% which would be approximately $112,000 from our revenue. Therefore, we would have a deficit budget in expenditures to revenue.
How will that shortfall affect day to day operations of the district?
When a district losses 6-10% of their revenue it can only affect the daily operations of the district. We currently have a committee of board members, administrators, teachers, and service personnel studying ways to save money throughout the district. The committee is taking their job very serious as the last thing we want to do is cut programs to the students. We are facing some of the toughest time in history for schools and public facilities.
Will the district be forced to make education cuts?
The committee is looking at 2-3 year plan to incorporate retirements into the cost savings for the district. Hopefully, we will not have to student programs in FY11. I am afraid that some cuts in certain areas will be must for the district to stay fiscally sound. As I said we are doing everything possible to keep from cutting educational programs in the district.
Does the district estimate the number of teaching positions that might be lost due to loss in state aid?
At this time, we are not planning on releasing any certified teachers in the district. We are looking at several other areas to save though.
How will those positions be determined?
If we have to reduce staff it will be based on seniority and in agreement with the collective bargaining agreements.
Will class size increase?
Due to declining enrollment I do not see much change in class size in 2010-2011.
Has the district made any concessions with the education association to try and save teaching positions?
We are trying to work with each association in the district to determine the best possible solutions for the student’s education. At this time we are still discussing in a committee format so nothing has been decided.
Provided the concessions were accepted how might that effect the teaching situation?
Not applicable at this point.
Is there a possibility that spring athletics could be cut?
I do not expect any extra-curricular cuts in the current year. We are still looking at student numbers and coaching staff for 2010-2011.
If so would it be all sports or just certain teams?
Not applicable
Do you see any possible solution to the State of Illinois financial situation?
That is a question for the legislatures in Springfield. Illinois has to increase the revenue into the state budget to meet the expenditures it has.
Do you think the State of Illinois will be able to come up with the miracle money to continue to operate?
The borrowing power of Illinois is continuing to drop, so without an increase in revenue for the State, we are all in trouble. Unfortunately the only way to really increase state revenue is through increased taxes and we all know the public opinion of that.
Is this isolated or do all districts face the same shortfalls?
I can say that all regular GSA formula schools are feeling the crunch. The flat rate and alternate formula schools (less than 190 districts out of the 800+) are not as depended on state money as we are. Everyone in our current area are in the same boat.
How long has the district been planning for this crisis?
We have been looking at our declining enrollment and a declining EAV for the past 5-6 years, but last year we really started looking at situation of the state. The storm has been brewing on the horizon for the past several years, but it is upon us now.
What do you personally think might be the outcome to some of the districts that have not planned for the financial crisis?
Illinois law establishes limits on a school district’s bonded indebtedness. The limit is calculated in relationship to the district’s EAV. Being a unit district our general limit is 13.8 percent of our EAV. If a district is at the limit on bonded indebtedness they have very few options other than major cuts to their programs and staff. Hopefully, we can weather the storm and still provide a quality education to our students without finding out what could happen.
Could you explain how with the State of Illinois woes predicted can the district continue to spend extra dollars on technical equipment and upgrades?
The Brownstown School District was one of 19 districts throughout the state that received an Enhancing Education Through Technology Grant (EETT). The grant is federally funded and had to be spent for items written for in the grant - technology and professional development. That grant money is totally separate from the education, OBM, transportation or other funds. We have always limited our technology expenditures to grant money that cannot be used for anything else.
One question that some people will not understand is How can the district afford to put in technical equipment like Smartboards and new computers then cut staff?
The Brownstown School District was one of 19 districts throughout the state that received an Enhancing Education Through Technology Grant (EETT). The grant is federally funded and had to be spent for items written for in the grant - technology and professional development. That grant money is totally separate from the education, OBM, transportation or other funds. We have always limited our technology expenditures to grant money that cannot be used for anything else.
Could that money being spent be put into the educational fund?
It is placed in the Education fund, but all expenditures must meet the stipulations of the grant. It is federally controlled and audited to meet the requirements set forth by the federal government. The money cannot be used for the daily operation of the district.
What kind of Federal funds and/or State , does the district have and how are they used?
We receive Title I, Title II, Title IV, and Title IID. Federal grants are very restricted so we are limited on how we can utilize them. All grants must be approved by the Illinois State Board of Education prior to any expenditures. We are audited every few years to ensure we are appropriately utilizing the funds. We cannot just put the money in the bank and draw interest on federal funds. We receive approximately $23,000 in Rural Education Grant (REAP). The federal government also provides us with IDEA special education funding which helps cover some of the cost associated with our special needs students. On the state level we get transportation reimbursement, special education, Block grant, school lunches, and special education personnel.
Can money be transferred from one fund to another to meet shortfalls?
We can loan money from working cash funds to any fund. A permanent transfer must meet the requirements of the state and requires a Board resolution.
On an estimate what is the cost to keep the building with heat and electric?
The last two years we have spent approximately $45,000 per year for gas and $45,000 for electricity.
What is going to be the first priority of the school district?
Our goal is to provide a quality education program for all children of the district. We plan on maintaining all programs that our dollars will allow.
How as an administrator do you handle the stress and pressure of knowing you are going to have to release teaching staff?
It is never easy to release a person from their job, but sometimes tough decisions have to be made to operate a school district. The state has put us in this situation and now it is our responsibility to do the best we can to provide a free and public education to our students. You have to look at the big picture and see all students you trying help and the many positives that go on in our schools.
Projections for 2010-2011 – I honestly can foresee a 10% reduction in state funding. Now whether it be GSA, Mandated Categorical, or State grants is yet to be seen.
