Urbana School District anticipates budget crisis

By Alissa Groeninger

Until this week the Urbana School District had not received any funds the state had promised.

The state owed the district $2.6 million, which it had promised for the 2008-2009 school year. While Carol Baker, director of business for the district, said the state usually owes school districts money, there was concern that the district would run out of funds before the school year was over.

“It depends on what they come through with before March,” Baker said.

This week, the state paid Urbana about $800,000.

School districts across the state are waiting for funds as the state is billions of dollars behind on payments, Baker said.

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    “It’s every school district. We’re all in the same boat,” she added.

    Schools rely heavily on state funds. Some districts receive 50 percent of their funding from the state.

    “What you’re seeing is this national economic slowdown,” said Matt Vanover, spokesman for the Illinois State Board of Education.

    Vanover said the economy is affecting the state and that there are more than $4 billion in bills that the state cannot pay because revenue is not coming in. Education has not been a crucial issue, said Mark Netter, Urbana School Board president.

    “It’s a matter of priorities in the state,” he said.

    Gene Logas, chief financial officer for the Champaign School District, said the district understands the state may not be able to fulfill all of its budget promises.

    “Delaying payment is bad enough,” he said.

    School budgets are built on the amount the state promises to provide. Because districts have not received the money from the state, they have been spending money they do not have.

    Although Logas said if the state only fulfills 80 percent of the money it has promised Champaign, the district will lose $1 million.

    He said those fees could be absorbed, but the services the district offers could be affected.

    Urbana receives 31 percent of its funding from the state. If enough money does not come through, officials will have to look into borrowing money to support the district’s $53 million budget, Baker said.

    Netter said the district has started discussing plans to borrow money in case more state funds do not arrive.

    The district has not had to borrow since 1993. Cuts were made four years ago because the budget was in a deficit.

    Unit 4 has not been affected yet either.

    “We’re pretty lucky,” Logas said.

    Urbana School Board vice president John Dimit said he is fairly confident the state is just late with its payments for the current school year, but he said state budget cuts for education are a possibility.

    “(We have to) try to curtail expenditures,” Logas said. “(The state’s) problems are so big and so real that it is a concern.”

    Baker said there is a concern that the state will reduce spending because of the economy and the state’s budget problems. If the district receives less money from the state, it will have to make cuts for the 2009-2010 school year.

    Special education programs and transportation in the Champaign district both cost more than $1 million to run and could be affected if budget cuts were made.

    “It all depends on the state’s cash flow,” Baker said. “This year, it’s obviously because of the economy.”

    While property values in Urbana have remained consistent and local revenue may be able to help, state budget cuts may still result in program cuts for the district.

    “Budget cuts will have an impact on our classrooms,” Dimit said. “A negative impact.”