Rising costs put strain on Lyons Township High School budget

District 204 finances

Updated: October 5, 2012 12:57PM

LA GRANGE – Lyons Township High School District 204 officials acknowledge they are on a financial path that cannot continue without dire consequences.

The district’s proposed $68 million budget for fiscal year 2012-13 shows just a $103,773 surplus at year’s end. The 2011-12 budget projects show only a $64,181 surplus at the fiscal year’s completion.

“We are right there at being in the black,” David Sellers, the district’s director of business services, said of this year’s budget. “There is no wiggle room at all; and 2013-14 is pretty much the same story.”

School Board President Mark Pera said many of the budget expenditures are out of the district’s hands.

“People need to know these are challenging times,” Pera said, before the School Board unanimously approved the 2012-13 budget Tuesday. “With costs, a lot of them are outside our control. Benefit costs and special education required expenses are skyrocketing.”

Pera also noted the possibility of more expenses being passed down to school districts from the Illinois General Assembly.

He said continued rising costs, coupled with district revenue being limited by tax caps, is putting a strain on district finances. Despite the Consumer Price Index doubling for next year’s budget – going from 1.5 percent this year to 3 percent next year – and allowing more revenue to be collected by the district under the tax caps, financial issues remain.

“When you have a $68 million budget and a $103,000 surplus (as projected for 2012-13), there is not a lot of margin for error,” Pera said. “When you have benefits going up 14 percent, transportation going up 17 percent, and your revenue only goes up 1.5 percent (this year’s Consumer Price Index), that is an unsustainable model.”

An increase in property-tax revenue of 3.8 percent for 2012-13 provides an overall district revenue boost of 2.1 percent. Revenue sources expected to be reduced in 2012-13, however, include a $600,000 drop in the state’s payment of the corporate personal property replacement tax. Sellers noted that the Illinois Department of Revenue has stated that past years’ replacement tax were overpaid, and $91 million will be reduced from the statewide distribution for FY 2013, an average of 14.7 percent for taxing districts.

Salaries for FY 2012-13 are anticipated to increase 2.8 percent, to $42.6 million. Benefit costs are expected to rise nearly an equal 2.9 percent, but that is after an expected 14 percent spike in benefit costs this year.

In a report on next year’s budget for the District 204 School Board, Sellers noted that normally three or four district claimants will reach the threshold of $50,000 in health insurance claims.

“In FY 2011-12, there were 10-12 claimants (who) accumulated costs of at least $50,000, and three claimants exceeded the individual stop loss of $150,000,” Sellers wrote.

District benefit costs show a 30 percent increase between fiscal year 2007 and the projected 2013 budget.

The $1.6 million in this year’s operations and maintenance fund already being spent is another example of district funding issues, officials note. Some work performed this year will be paid for from next year’s budget, creating an ongoing issue on using next year’s money to pay for this year’s projects, officials said.

Salaries make up $42.6 million of the district $68 million in expenditures for 2012-13. Benefits comprise another $8.1 million.

While hovering dangerously close to being in the red, the district is not having to tap into its cash reserves, officials noted.

“We are in a tight budget situation,” Sellers said, “but we have been able to come in under budget.”

Eating into district revenue annually is required property-tax refunds from assessment objections. While down from a recent high of $2.1 million in 2010-11, this year’s and next year’s budgets both show the district losing $1.6 million annually in property tax refunds from objections.

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