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Financial Overview and Budget Planning for FY 2009-2010: Challenges and Strategies

This report outlines the budget hearings for FY 2009-2010, focusing on the revenue outlook and expenditure challenges faced by the district. Key issues include a dramatic drop in the Consumer Price Index (CPI), projected state deficits of $9 billion, and increased foreclosures and bankruptcies affecting local tax revenues. The report emphasizes assumptions around minimal increases in property tax revenue due to tax caps tied to the CPI, along with uncertainties regarding state and federal funding. It also discusses budget priorities aimed at enhancing educational outcomes in elementary, middle, and high schools.

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Financial Overview and Budget Planning for FY 2009-2010: Challenges and Strategies

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  1. 2009-2010 BUDGET HEARINGS John Prince Chief Financial and Operating Officer

  2. The Budget Planning Cycle

  3. FY 2009-2010 Revenue Outlook • Consumer Price Index (CPI) drops from 4.1% –0.1% • Estimated $9 billion state deficit in FY 2009 • Lag in state payments to U-46 of $10-12 million • Increase in foreclosures in Kane, DuPage and Cook County of 36% vs. 2007 • Increase in bankruptcies in Eastern Division of Illinois of 46% vs. 2007

  4. FY 2010 Revenue Outlook-Budget Local Revenue: • Assume minimal increase in property tax revenue due to tax caps tied to CPI. Possible decline in tax collections due to foreclosures and lower assessed values. State: • Assume no increase in General State Aid or categorical funding. Potential reductions in funds unless state increases revenue stream. Federal: • Uncertainty regarding federal Reinvestment and Recovery dollars. • Stimulus money is short-term and not sustainable. • Some stimulus dollars may require program expansion.

  5. Local property taxes are capped by the CPI (Consumer Price Index). The CPI hit an all-time low of 0.1% in January, down from 4.1% in 2008.

  6. Local Revenue Not Expected to Increase

  7. FY 2010 Revenue Outlook-Budget Local Revenue: • Assume minimal increase in property tax revenue due to tax caps tied to CPI. Possible decline due to foreclosures and lower assessed values of property. State: • Assume no increase in General State Aid or categorical funding. Potential reductions in funds unless state increases revenue stream. Federal: • Uncertainty regarding federal Reinvestment and Recovery dollars. • Stimulus money is short-term and not sustainable. • Some stimulus dollars may require program expansion.

  8. State Revenue Not Expected to Increase

  9. FY 2010 Revenue Outlook-Budget Local Revenue: • Assume minimal increase in property tax revenue due to tax caps tied to CPI. Possible decline due to foreclosures and lower assessed values of property. State: • Assume no increase in General State Aid or categorical funding. Potential reductions in funds unless state increases revenue stream. Federal: • Uncertainty regarding federal Reinvestment and Recovery dollars. • Stimulus money is short-term and not sustainable. • Stimulus dollars may require program expansion.

  10. Federal Funds - 2004 to 2010(Stimulus dollars not included ) +8.5 Million

  11. FY 2009-2010 Expenditure Outlook • Negotiated salary increases totaling $10.4 million • Employee benefit increase of $6.5 million • Pay freeze for administrators and non-union employees • Continue to restrict discretionary funds • Careful examination of staffing in all areas with reductions in force made in March • Reduce in a manner that minimizes impact on teaching and learning

  12. Investment Priority - Elementary • Lowering class sizes in all K-3rd classrooms to 25:1 • Lowering class sizes in all 4-6th classrooms to 28:1 • Literacy Coaches at all Elementary schools • Staffing to state standards in Special Education

  13. Investment Priority - Middle Schools • Increasing Rigor • AVID (Advancement Via Individual Determination • World Languages • Literacy coaches • SWAS (School Within a School) • Support for Students • Guidance Counselors • Fresh Start Flexibility

  14. Investment Priority - High Schools • IncreasingRigor • Advanced Placement Priority • Academy admissions increased • AVID (Advancement Via Individual Determination)

  15. Revenues and Expenditures

  16. Questions?

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