Mark Rising for District 204 School Board

An Informed, Fresh, Committed and Compassionate Voice for Indian Prairie School District
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DISTRICT FINANCES The purpose behind this section of my website is simple: I am very concerned about the financial situation our district is facing in the future. We currently operate a lean budget and are operating at the one of the lowest operation expenditures per pupil in Du Page County -- something we can all be very proud of.   However, we have incurred a substantial amount of bond debt over the past few years.  Additionally, our short-term financial budget forecast (see below) is balanced only if certain events occur.  In order to address this situation, business as usual has to change.  All of the information below is available on the IPSD website, http://www.ipsd.org  

Summary if you don't want to read the details below:  The debt our district carries is increasing.  Given the economic climate and slower growth we are experiencing, revenue is not keeping pace with expenditures.  Financial assistance from the State of Illinois is questionable and is likely to decrease.  The budget forecast proposed by the Administration for the next few years does not address the problem.  Without strong leadership, the financial situation we are facing will begin to have a greater affect our community.  There are still opportunities to address these issues without the need to raise more revenue, but we will need to act quickly. 

Fast Facts:(Taken from IPSD website, http://www.ipsd.org) (Fall 2010-11 IPSD Newsletter see the 2nd page)
  • We currently have bond debt in D204 of over $300 million.  Adding in the interest, the total is over $482 million that we as taxpayers will have to pay.  This is in addition to what the State of Illinois owes us.
    • By March 31, 2011 the State of Illinois will owe our district more than $13 million.
    • We can not continue to take on more debt in D204.
  • 12% of D204's budget goes to pay off our debt....
  • ...while only 7% of D204's budget is used for operations and maintenance of our schools!
  • Over 84% of D204's revenue comes from property taxes.  This percentage is increasing at the same time that homeowners assessed values are decreasing.
  • 13% of D204's revenue comes from the State of Illinois and this percentage is going down.
  • Last year the administration and school board made cuts in order to balance our budget. Even with these cuts, the district still ended the year $5.6 million short of a balanced budget.  (largely due to late funding by the state)
  • In summary, our debt is increasing, our revenue is not keeping pace with expenditures, and financial assistance from the State of Illinois is questionable. 

IPSD BUDGET FORECAST - (Taken from the IPSD web site, http://www.ipsd.org)  (see budget forecast from March 7, 2011)

2011 - At the March 7, 2011 school board meeting, the Administration presented a revised budget forecast for the next 3 years.  This revised budget forecast shows a $1.9 million deficit by 2013.  This is a much lower deficit then D204's 2010 forecast, even after we made cuts in the district.  However, this revised forecast is based on the following assumptions:  

  • Assumption #1 – D204 assumes the current consumer price index (CPI) will increase dramatically from its current 1.5% (the second lowest it has been in 20 years) to 2.5% between now and 2013.  ANALYSIS:  Assuming a two year jump in the CPI of 1% given the current economic climate is highly risky.  Anything less than achieving the assumed CPI increase will increase our budget deficits.  A side note...in 2009 we assumed by 2011 the CPI would be 2.5% and it is only 1.5%.
  • Assumption #2 – D204 assumes that by 2013 the Equalized Assessed Value (EAV), which is the current assessments on our homes, will be a positive 3.4%.  The current assessment percentage will be negative 4% this year and next year (2012).  ANALYSIS:  The Administration and school board are assuming a swing of more than 7% in the EAV % in one year, 2013.  Anything less than the assumed 7% increase will increase our budget deficits.
  • Assumption #3 – D204 assumes that General State Aid (GSA), money the State of Illinois pays us for education (this currently makes up 13% of our budget), will increase.  ANALYSIS:  Governor Quinn is actually proposing a cut in the GSA.  Should this cut in GSA be approved, our budget deficits will increase substantially.

If all of these assumptions materialize, our yearly deficit in 2013 will only be $1.9 million.  However, should any one of the above assumptions fall short, our yearly deficit will increase substantially.  We CAN NOT base our financial future on assumptions.

Without strong financial leadership, the budget forecast proposed by the Administration will begin to have an effect on the quality of education our children are receiving.  There are still opportunities to address these budget gaps without the need to raise more revenue, but we will need to act quickly.  Business as usual needs to change!