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Five-year projection shows $5.5 million in deficit spending

Published: Saturday, Dec. 14, 2013 5:30 a.m. CDT

MINOOKA – A five-year financial projection shows Minooka High School District 111 could be outspending its revenue by as much as $5.5 million by fiscal 2019.

Doreen Linderman, senior financial adviser of PMA Financial Network, presented the five-year outlook Thursday to the district’s board of education meeting.

The financial outlook is based on assumptions about the district’s revenue, mainly through property taxes and state aid, and projected student population and staffing for expenditures.

Minooka Community High School receives 71.4 percent of its revenue through property taxes, 6.4 percent from general state aid, 7.3 percent from other state aid and 13.7 percent from other local sources. Federal aid is just 1.2 percent of the district’s budget, Linderman said.

The district’s equalized assessed valuation, or EAV, which has been declining since 2009, is projected to drop an additional 5 percent this fiscal year, 3 percent in fiscal 2014 and not begin to rise until 2017.

Even as the economy picks up, it takes a while for it to be reflected in the EAV, Linderman said.

A negative EAV will provide more in state aid, Linderman said.

“As your taxes go down, your entitlement goes up,” she said.

MCHS is entitled to $1.9 million for fiscal 2014, projected to increase to $2.4 million in 2015, and up to $3.6 million in fiscal 2019.

But the state is not funding public schools at 100 percent: The district will be funded at 88.7 percent for fiscal 2014, with a projected decrease to 85 percent in 2015 and continual decline by 1 percent each year thereafter.

FMA considered two scenarios for student enrollment and staffing to calculate operating expenses for the projections. With no increase in full-time employees and a projected increase of approximately 25 students a year, the district will need to spend $31.8 million and will receive $29 million in fiscal 2014.

That will increase to $35.4 million in expenditures approximately $29.9 million in revenue by fiscal 2019.

In the second scenario, with eight additional teachers to handle the student increase, the district will likely spend $36 million and receive $29.9 million in 2019.

Other factors included in the projections were health benefit increases and a reduction in state reimbursement of transportation expenses.

A new teacher’s contract is up for negotiation in FY 2016.

“We are watching that deficit grow to $5.5 million over a five-year period if you don’t do anything,” Linderman said.

If the assumptions hold true, the district could see its fund balances dipping into negative numbers in the last two years of the five-year projection.

On a similar subject, Superintendent Jim Colyott announced that out of 99 high school districts in the state, MCHS operating expense per pupil is less than the median cost. While Illinois high school districts range from $8,638 per pupil to $25,289, MCHS spends $13,310 per pupil.

“I think this is a huge success,” Colyott said. “This is a significant improvement over previous years and we are proud about it.”

Board of education members, in a 7-0 vote, approved the fiscal 2013 levy rate of 2.33982 per $100 of owned property, below the 2.34 rate the district is trying to keep. The rate will bring in $25,322,231 in property tax revenue to the district.

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