Nearly five years ago, District 95 was facing a budget crisis and cut programs and raised registration fees in order to stabilize the budget.  Today, the District is in much better financial shape and ends the fiscal year with surpluses, or an excess supply of funds.

            “We were able to cut back on the budget so that going forward from there, we were operating with a surplus in our budget each year instead of having to borrow money to make our payments during certain parts of the year,” Kathy Brown, School Board President, said.

            Since the 2009-2010 school year, the Board has conservatively spent money in order to prepare for potential pension reform and state funding cuts that could affect the District’s finances, according to Brown.

            “We need to live within our means, we can’t overspend.  We have a budget and we have to stick to it,” Brown said.  “In the last year, we’ve received upgrades in our financial status from bonding companies.  We want to remain responsible enough to maintain those great ratings we have right now.”

            This year, District 95 is expected to end the fiscal year with a surplus of approximately $3.5 million, according to the District’s PMA Financial Planning Program report.  The District was recently upgraded to a AAA bond rating, or an assessment of the creditworthiness of a corporation or government’s debt issues.  For some, this upgrade is an indication of the District’s financial improvements and proof the District should continue doing what it is doing, but others like Jim Burke, Board of Education member, believe that the School Board should focus on rolling back fees and investing in areas like technology instead of focusing on their bond ratings. 

            “We’ve been conservative and put ourselves in good financial position, and we need to look at our needs and invest in technology and facilities,” Burke said.

            This spring, the Board of Education approved a plan that will increase the student-to-iPad ratio to one-to-one at LZHS, and Burke believes that the Board should continue to invest in programs like these, despite the looming pension reforms.

            “It’s good to have balance, but teachers are important, technology is important, and improving facilities is important,” Burke said.

            Burke would also like to see registration fees reduced to the rate they were at before the budget cuts.  However, Brown says that the School Board does not want to roll back fees only to have to increase them again if Illinois legislators decide that school districts will help cover teacher pensions.

            “This year, we really were thinking about that pension liability that we might have and still not knowing what it is, we were more reluctant to reduce [registration] fees,” Brown said. 

            Moving forward, Brown says her goal is to continue “living within our means” and preparing for potential changes.  Projections show that District 95 will continue to end each year with a surplus.

Sidebar: Pension Reform

The state of Illinois has the most underfunded public employee pension system in the nation, according to a March Chicago Tribune article.

 Teachers pay 9 percent of their salaries toward funding teacher pensions, and the State is supposed to be contributing to the pension system as well.  However, the State of Illinois has not paid into the program and has fallen $53 billion behind in its payments for pensions, according to the Teachers’ Retirement System of the State of Illinois’ website. Because of this, legislators are considering shifting some of the teacher pension costs to local school districts.

Although it is still unclear what percentage of the costs may be shifted to school districts, the smallest shift being discussed is 0.5 percent per year and the largest shift is 1 percent, according to the District’s PMA Financial Planning Program report.

“[District 95 is] in a much better place than most Districts in the state,” Brown said.  “We know we will have an additional liability, but we don’t feel it would make us make any cuts or reductions in near future.”

Not only does Brown believe the District can successfully absorb the costs, the PMA report conducted also mentions that “almost anything the State does will hurt the District, but its impact is diminishing.”

            While pension reform could present a challenge to District 95, both Brown and Burke agree that the District will be able to handle the changes and still be in good financial shape.