Morris Community High School, like many school systems across the country, continues to experience challenging financial times during very uncertain economic conditions. The Board of Education is committed to providing the best level of service given our available resources. The instability of state funding, declining local tax revenues, and increasing number of unfunded state and federal mandates have created “the perfect storm” in the world of school finance. The intent of this article is to provide a school finance “primer,” present our current financial situation, and discuss future projections moving forward.
There are nine separate funds that comprise a school district budget. The six operating funds are; Education, Operation and Maintenance, Transportation, Illinois Municipal Retirement Fund/Social Security, Working Cash, and Tort. The main fund is the Education fund.
Illinois relies heavily on local property wealth to fund education. 68% of our current fiscal year revenue is generated from local property taxes while 16% comes from other local sources. 14% of the FY 11 revenue came from the state and 2% from the federal level. The Education fund comprises nearly 60% of the overall annual budget.
On the expenditure side, 61% of district costs come in the form of salaries and benefits. 31% go toward purchased services, such as transportation, food service, special education, and vocational education costs. The remaining 8% is spent on supplies, materials, and equipment.
Each year, the Illinois State Board of Education reports a financial profile for each school district. The four designations are recognition, review, early warning, and watch.MCHS will come off the 2009 watch list and, with a score of 3.10 out of 4.00, receive review recognition for 2010.
In September of 2010, Morris Community High School was awarded the SchoolSearch Bright Star Award for the first time. Only 81 out of 869 districts were recognized for ranking in the top one-third in academic performance, but having a per pupil expenditure rank in the lower one-fourth of the State of Illinois. This recognition is an indicator of our board of educations dedication to fiscal responsibility.
The District 101 tax rate, generally between $1.75 and $1.80 per $100 of assessed valuation, places MCHS in the top 25% for the lowest high school district tax rate in Illinois. The Board of Education works hard at maintaining that target rate – a challenge that grows more difficult with the economic factors identified previously.
MCHS has partnered with Morris Elementary District 54 and Saratoga District 60C to share a variety of services that help reduce costs. Regular and special education transportation services, a curriculum coordinator, and several operation and maintenance services are shared in an effort to cut costs and increase efficiency. We also share a technology coordinator with the Grundy Area Vocational Center.
Working with the Grundy Economic Development Council, local, county, and state governments, we continue to explore new sources of revenue that can help support Morris Community High School.
The economic challenges faced by our state make it very difficult to prepare accurate budget projections. The state currently owes MCHS over $200,000, mainly in unpaid reimbursements for transportation and special education mandated services. We expect a decline in the amount of General State Aid we qualify for which will have a negative impact on the Education Fund.
Early projections of the total Equalized Assessed Valuation (EAV) indicate an annual decrease of five percent or greater for the next several years. The total dollars available to a school district is based on the value of the property located within our district boundaries. A decrease in the taxable residential and commercial property values decreases the amount of money we have to include in our budget. Lower EAV, a constant tax rate, and less general state aid will create severe budget challenges.
The Board of Education, administration and staff are committed to providing quality services with our available resources. Since losing thirty-five percent of the district EAV in 2005, we have been able to survive financially with minimal impact on the educational program.
The district will continue to implement a variety of cost containment/reduction strategies, including the use of attrition (not replacing staff retirements when possible), appropriate staff reductions and creating efficiencies in the area of operation and maintenance.
Our current financial projections indicate that with limited enrollment increases, the use of alternate revenue sources and continued implementation of cost containment/reduction strategies, the district will weather this downturn. Deeper reductions and additional alternate revenue sources and strategies will need to be explored if the decline in local revenue is greater than anticipated. I encourage you to visit our website at www.morrishs.org to review financial projection information prepared by PMA. The administration/ board of education page on our website also contains the 2010 Annual Financial Report and current fiscal year budget. Feel free to contact me at phalloran@morrishs.org or 815-941-5327 for further information.
