School District 65 officials project payroll costs will rise much faster than property tax revenue over the next few years — leading to deep budget deficits.
The district three years ago rewarded its teachers with what was described then as the richest compensation package increase since the advent of tax caps in 1994.
That contract, signed early in what's turned out to be a prolonged economic downturn, locked in pay hikes totalling 27 percent over the four years ending next June for most teachers. Meanwhile, the Consumer Price Index has risen just 5 percent in the last three years.
The board did get teachers to agree to extend the school day by 10 minutes for elementary schools and 20 minutes for middle schools as part of the deal.
Going forward the board is projecting salary costs to increase by 3.7 percent a year, while projecting that the cost of living — and its tax revenues — will increase just 2.5 percent a year.
And it forecasts that employee benefits, including health insurance will rise at a rate of 8 percent per year — based on the rate of increase in the recent past.
The district has benefited recently from one-time increases in tax revenue, leading to modest budget surpluses. But it now forsees growing budget deficits, starting at $3.3 million for 2012-13 and rising to $8.7 million by 2015-16.
The district's finance committee is scheduled to discuss a recently released set of recommendations from a citizens' ad-hoc budget committee about what to do to close the deficit and the school administration's responses when it meets at 6 p.m. tonight at the district administration building, 1500 McDaniel Ave.