Flossmoor School District 161 will be running a deficit of $4.81 million in the 2021 fiscal year but most of it was expected, according to officials.
On Sept. 14 the school board unanimously approved the FY2021 budget following a public budget hearing. The approved budget anticipates $33.87 million in revenue with $38.68 million in estimated expenditures from July 1, 2020, through June 30, 2021.
Frances LaBella, the district’s associate superintendent of business operations, said much of that deficit was anticipated when the school board decided to spend $4 million on construction at Western Avenue and Flossmoor Hills Schools. According to her report to the board, roughly $1.5 million of the total deficit constitutes an operations deficit.
The majority of the deficit unrelated to construction expenses is attributable to $1.7 million the district received as part of the Illinois Tax Grant Relief program. While that constitutes state money coming to the district, the board agreed to abate close to $2 million in property taxes.
Because of the way Cook County collects tax bills along with the abatement, collection is “artificially low” on this fiscal year’s budget but works out in the long run, LaBella said.
“The majority of the abatement is hitting us in this fiscal year,” she said. “It will right itself next fiscal year.”
Board documents show a tentative surplus of $1.29 million is projected in fiscal year 2022. LaBella said she intends to give a further explanation of the situation in October, when the district begins tax levy discussions.
Adding to the complications for this budget, though, is that tax revenues are currently being collected at a rate of about 93 percent. The state's Evidence-Based Funding is expected to be flat at best, because of the pandemic, according to LaBella. To get back to a balanced operating budget, she suggested the district will have to scrutinize its expenditures.
LaBella said she would consider $300,000 to $500,000 a “real” deficit beyond the unique circumstances.
The FY2021 deficit is expected to reduce the district's fund balance from $30.23 million to $25.42 million. But it is expected to rise almost back to where it started in the four-year projection LaBella presented.
LaBella said as long as revenue collection holds at 93 percent, and Evidence-Based Funding at least stays flat, the future of D161’s finances should be okay, especially when much of the deficit was “by design.” She said cuts could be minimal, if managed properly.
“We should definitely be able to go back into a position where we should have a balanced budget,” she said. “I do not believe the future is as bleak as some would like to make it look when you’re looking at a $5 million deficit.”
LaBella also noted 88 percent of property taxes had been collected by the end of August, which is usually typical by July. She plans to continue to report those numbers to the board.
“I’m very curious to see what comes in in the month of September,” she said.