The intricacies of school finance are quite extraordinary. Did you know school districts receive 10 percent of their state revenue after the fiscal year closes?
For ISD 166 that means that over $400,000 is not available for our school during the fiscal year. This delay in funds makes managing cash flow very difficult, especially without a sizable fund balance. Many school districts, including Cook County, need to borrow money during the school year in the form of “aid anticipation certificates” to meet financial obligations. Borrowing money costs money. This is why responsible boards, like the school boards in Cook County, talk about building fund balances.
In a recent letter to the editor, a community member shared information about two different revenue streams called “Local Optional Revenue” and “Board Approved Operating Levy.” There are several other revenue streams, some are voter approved, some require applications, while others are unpredictable and result in adjustments, sometimes more than two years after the fiscal year closes. These adjustments can be positive or negative and often show up unexpectedly.
Our funding fluctuates yearly based on hundreds of formulas, most of which are tied directly to enrollment numbers. If we estimate our numbers too high, we will receive a negative adjustment in the following year. If we estimate our numbers too low, we will receive a positive adjustment. Because our enrollment changes throughout the year and the fact that students at different grade levels carry different weights, it is almost impossible to make a perfect enrollment projection. Historically, ISD 166 has done very well predicting enrollment, however, this definitely adds a complexity to the budgeting process.
Last fall we had a voter approved operating levy fail. The difficulty of school finance coupled with the failure of the levy has resulted in the board setting a $500,000 budget reduction/revenue increase target.
Over the years, we have watched our charter schools resort to fundraising to help aid in programming. Now, ISD 166 finds itself in the same position. The vote tells us that the majority of people who went to the polls do not believe school funding should come through taxes. It does not necessarily mean that our community does not support education and our schools. That question remains to be answered. Schools can accept financial donations. To donate, all one needs to do is stop by and drop off a donation. ISD 166, and I am confident other schools, will provide you a receipt. At ISD 166, we recognize donors at monthly board meetings. If you wish to remain anonymous that is fine too.
I believe our community values and supports education. If this is indeed true, please consider making a financial donation to the school of your choice. All school districts will begin looking at finances for the 2016-17 school year shortly after the winter break. Please consider making a financial contribution soon so that educational leaders can appropriately budget for the future.
Each month a representative of our local schools will offer thoughts in Issues in Education. This month’s contributor is Beth Schwarz, superintendent of Cook County Schools – ISD 166.
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