Hall facing mounting budget deficit
SPRING VALLEY — Faced with a mounting budget deficit officials say could total $300,000 over the next two years, Hall Superintendent Mike Struna says he’ll press the school board to decide by February if the district should borrow money or make spending cuts.
Struna has declined to say whether budget cuts could be made to programs, faculty or staff, but he told the BCR Wednesday the deadline for any cuts to district personnel would be Feb. 17.
In a report to the board Wednesday, Struna said Hall could expect nearly $206,000 in cost increases for district salaries and health care over the next year.
But for the bulk of Hall’s current financial problems, Struna blames the state of Illinois for its failure to keep up with reimbursments payments to the district. The state itself is carrying a $9 billion deficit.
To date, the state owes Hall $130,000 in unpaid reimbursements for special education and transportation, a shortfall Struna says will likely climb to $159,000 by the end of this year.
Struna estimates that next year Hall could see a $150,000 shortfall in state payouts – leaving the district with a possible $307,000 deficit over the next two years.
“And where does it come from? Our reserves,” Struna said.
And at Hall, cash reserves are tight. The district started the year with just $771,000 in reserve – a total Struna says is enough “for only two months worth of operation expenditures.”
As a result, the district has been placed on “financial review,” a status the Illinois State Board of Education reserves for schools carrying less than 90 days’ cash on hand.
Struna told the board his main short-term concern this year is that Hall could have to borrow money to cover its July payroll. That money, he said, would have to be paid back using property tax receipts the district won’t receive until August.
If the district borrows money, it would be for the sixth time since 1998, district records show. Currently, the average local taxpayer is paying $210 a year to cover the $4.8 million in bonds Hall already has borrowed.
The district has a bond capacity of $8 million.
“We have room to borrow, but I would say borrowing $300,000 would only get us through a year,” Struna said, telling the board “you’re probably looking at half a million (dollars)” to make borrowing a viable option.
Struna told the BCR there is a chance some missing reimbursements from the state could come to the district next month. He suggested that could soften Hall’s deficit, possibly giving the board an option to blend borrowing with smaller spending cuts.
District records show Hall has run a deficit in its education fund four of the last five years, and the last time Hall made budget cuts was in 2005, responding to a $600,000 deficit.
At the time, the district raised fees, left two faculty positions unfilled following the retirement of two teachers, and closed Hall’s swimming pool.
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