District 203 prepared to operate on reserve funds next school year if Illinois budget does not appear

OTHSO’FALLON – If the lawmakers in Springfield can’t pass a budget and approve funding for local schools, O’Fallon High School can operate for just under a year, running out of money in May 2017.

Superintendent Darcy Benway gave a grim and direct report about the state of the state and the district’s finances at the recent Board of Education meeting. She said that while District 203 is in much better shape than most school districts, things will be extremely tight next school year if the legislature can’t work to pass a budget and allocate education funding.

“General State Aid payments usually come to us between August and June. We receive 22 payments, generally not receiving any in July. Without a budget, none of those payments can be made or accepted by the district. Categorical payments come in a quarterly basis and pay for transportation and special education. Thirty-three percent of our general education fund comes from the state,” Benway explained.

However, the problems at the state level also impact the district’s federal dollars as well.

“Federal funding for schools flows through the state. So if the state of Illinois doesn’t have a budget and can’t appropriate money, we can’t get any of our federal money either. OTHS receives approximately $1.2 million in federal funding each year. This will impact free and reduced breakfast and lunch programs, among other areas. We’re going to have to subsidize those programs in the absence of reimbursement from the federal government,” Benway said.

The budget crisis is also impacting District 203 in other indirect ways, aside from just education funding.

“The roundabout construction at Milburn and Simmons Road will be shut down effective July 1 if the state doesn’t come to a budget agreement. The work was scheduled to be completed prior to the start of school. If its not completed, that’s going to mean significant detours, that’s going to increase bus ride time for students, and we may have to add additional buses. This will create additional cost or situations where students may very well be on a bus in excess of an hour,” said Benway.

Despite such a bleak outlook, Benway said things for District 203 aren’t as bad as they could be due to prudent planning and conservative budgeting.

“The Board of Education has made some very difficult budget decisions over the past few years, making necessary reductions in deficit spending in order to preserve reserves. So while we were receiving pressures from outside to expand, we held the line on a lot of things and thank goodness we have those reserves today,” she said. “Upon receipt of our property tax revenue in July… it starts to trickle in by July… and if we use all of our reserves, everything, we can make it through the end of May. We can get through the actual instructional part of the school year with our doors open. That’s horrible news that we can’t even make it an entire year, but we’re in a much better place than most districts. There will be a lot of school districts that will be in serious financial stress.”

Dr. Darcy Benway

Dr. Darcy Benway

Benway said she is operating under the assumption that the state will not go back and repay districts any payments it may miss due to a lack of budget. She said they are planning on the state just missing those payments and moving forward. She also said delaying the start of school won’t help the situation, due to union contracts that pay the teachers over a full calendar year and not just when students are present in classrooms.

“It doesn’t matter if school starts August 1 or September 1, they get paid for 180 days over 12 months. So unless the Board were to cut the school year, and reduce the number of days the students are in class, they are entitled to their full pay and will be paid according to the contract. It doesn’t really save us anything to delay the start of school,” Benway explained.

The district has no plans to not open come August, as has been suggested by other school districts.

“OTHS prides itself on being student centric and will do what it needs to to open school on time. Not opening school would be very detrimental to our students. Why do we have reserves if not for a time like this? We put that money aside for a rainy day. Not for a salary increase here or for a new air conditioning system for the gym there. They are for a rainy day and we are in hurricane season right now,” Benway said. “I’ve got to believe this will be resolved prior to all of these school districts shutting their doors. I can’t see it any other way.”

Benway emphasized that residents in District 203 need to understand that while things may appear to be business as usual heading into this upcoming school year, if the state doesn’t pass a budget, things will be very bad behind the scenes.

“Stakeholders have got to understand that just because we’ve done it right, and that we saved money back for a rainy day and we can open school, this is devastating to us. If we use those reserves, it does have a significant impact to our community, because those reserves are gone and we will have to call upon our community for support in the future if it’s needed,” she said. “OTHS has diligently worked to live within its means. We are still delivering on a majority of expectations even though local and state revenues have been cut and the expectations places upon us have increased ten fold.”

The district now must watch Springfield to see if lawmakers can put together a budget and address education funding.