Highland News Leader

Highland School District’s financial profile status improves

The condition of the Highland School District’s finances has been upgraded.

For the first time since fiscal year 2011, the district has been placed on the “financial review” list by the Illinois State Board of Education (ISBE).

Highland was among 186 school districts in Illinois that appeared on the “review” list, the second highest of the four classifications used in the the ISBE’s 2015 Financial Profile. The report is based upon fiscal year 2014 data received from school districts and provides a snapshot in time that helps ISBE gauge school districts’ financial health.

In this annual report, districts are categorized by the ISBE as falling into financial recognition, financial review, financial early warning, or financial watch. The ratings are based on each district’s annual financial report for the prior year, which ended June 30.

For Highland, being listed to the review list is an improvement. The district was on the early warning list last year. The district was also on the early warning list in 2003, 2004, 2008 and 2009.

The district was earlier on the financial watch list in fiscal year 2005, 2006 and 2012.

It was on the financial review list in 2010 and 2011.

Highland Superintendent Mike Sutton on Thursday attributed the district’s improved financial outlook to the school board’s annual effort to cut expenditures.

“We are getting closer to a balanced budget,” he said. “Next year, we expect to reduce our expenditures by another $300,000 and bring our deficit down to hopefully a manageable amount.”

The district currently has about an $800,000 deficit.

Sutton said the district has been “fortunate” in the last couple of years, noting they have been able to make most of its reduction in forces through attrition.

Sutton expects that trend will continue during the coming fiscal year as four certified staff members will be retiring.

While Sutton was not shocked to see the district’s 2015 Financial Profile status improve, he said the education fund is expected to finish with a $1.6 million deficit at the end of the current fiscal year. The education fund pays for teacher salaries, school supplies and textbooks.

In the meantime, Sutton is keeping a close eye on what happens with the state budget. Gov. Bruce Rauner has proposed $30 million in new spending for preschool development in the budget year that begins July 1 and about $4.8 billion in general state aid for schools, according to budget documents. That’s up about 6.4 percent over the $4.5 billion that lawmakers approved last year.

Sutton said until a new state revenue source is identified, it’s hard to know if schools won’t feel cuts elsewhere down the line as lawmakers work to close a $5 billion hole in the coming budget year.

And with new calls for pension reform from Rauner, Sutton is concerned about what schools might eventually be asked to contribute to workers’ pension funds.

“If there is a cost-shift, that will devastate all school districts,” he said.

As it is, Illinois school district finances continue to show the strain of operating with fewer funds from federal, state and local sources, according to the ISBE.

The number of districts earning ISBE’s top financial rating dropped again this year while those districts that are projected to deficit spend this school year increased to 550 (or 64.2 percent) of all districts.

Many of the school districts in Illinois have already made significant cuts; they have reduced staff, delayed building repairs and upgrades, and eliminated academic and extracurricular programs with little financial relief in turn.

“Our Financial Profile data shows that while our schools continue to cut costs and stretch shrinking financial resources, many still must borrow or dip into their reserves in order to stay in the black,” State Superintendent of Education Christopher A. Koch said.

Koch said there appears to be a direct correlation between the decrease in state funding and the declining number of districts in “financial recognition,” the highest rating.

“Our board will continue to advocate for more state education funding through the spring so schools can start a new fiscal year on July 1 with more resources and support for the needs of all students,” Koch said.

The ISBE is seeking an additional $729.9 million in education funding from the current year to fully fund General State Aid, which has been prorated for the last four years.

The 2015 Financial Profile for all districts in Illinois will be available through ISBE’s School Business Services page in alphabetical order, by count or Financial Profile designation at www.isbe.net/sfms/P/profile.htm.

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