The Evanston/Skokie School District 65 Finance Committee will receive a budget update tonight that shows the district has to either trim spending or take on more debt to keep its budget balanced over the next several years.
The district’s forecasts show it faces budget shortfalls totaling about $2.5 million over the next four years, or an average of about 0.7 percent of its total spending each year.
Another staff report the committee is to receive tonight suggests reducing the operating budget shortfalls by shifting up to $450,000 a year in expenses for computers and other technology equipment now paid out of operating funds to capital bond funding.
Chief Financial Officer Mary Brown says the district will need to issue $10 million in bonds next year to take care of life safety and other building improvement projects, but will still be far below the state-mandated caps on its debt financing, leaving room for using debt to fund the technology investments.
Based on current debt levels, she said, the district could issue $76 million in additional bonds without seeking taxpayer approval in a referendum, and about another $60 million beyond that if it won taxpayer backing.
The financial projections assume annual increases of 3 percent in salaries, 10 percent in health insurance, 5 percent in other benefits and a 2.5 percent increase in most other costs. They assume stable enrollment and staffing levels.
The projections assume that the taxable value of existing property in the district will rise about 2.5 percent per year, but that the district will get an increase in new revenue equivalent to about 3 percent of its total tax base when a tax increment financing district expires in 2009.
The school district gets about 75 percent of its revenue from the property tax, with the rest coming from a mix of federal, state and local sources.
Salaries account for 68 percent of its operating expenses, with benefits adding another 12 percent. Purchased services and supplies and materials account for most of the rest.
District 65’s financial profile score with the state board of education is the second highest of four levels the state maintains, and the projections assume it will stay in that range for the next four years.