Plainfield School District Files an Amended Budget with a $1.8 Million Deficit
The district's operating fund deficit is an improvement over what was anticipated last fall, but reduction in general state aid could cause future deficits.
Editor's note: This article has been updated to include response from Edward Hospital.
Plainfield School District 202 is projecting a $1.8 million operating fund deficit in its updated budget.
The school board on Monday approved putting its amended budget on public display for 30 days.
The $1.8 million deficit is an improvement over last September’s anticipated deficit of about $8.9 million. At the time, the school board was required by law to file its budget, but noted that it would be updating the budget throughout the year and filing an amendment this winter.
Among the savings include eliminating some positions that were included in the budget as placeholders only in the event that increases in student enrollment would force the district to fill those jobs, said Angela Smith, the district’s assistant superintendent for business and operations. Many of those jobs had been cut in prior years, but not removed from the budget, and the district has no intention of filling them.
The district also received additional Title I revenue and has new energy savings, Smith said. Money was also saved in transportation because fewer bus routes were needed.
The board will vote on the amended budget at its March 18 meeting.
Financial woes are likely to continue for the district, mostly due to the unpredictability of state funding, according to Michael Frances, the senior financial advisor for PMA Financial Network.
The group predicts salaries will rise about 1.5 percent per year and health benefits costs will increase by 8 percent per year.
Also, the state is likely to decrease its general state aid. State funding for school districts was prorated to 89 percent, and that may decrease again, Smith said.
If the state prorates its general state aid to about 83 percent, the district is likely to face a $3.9 million deficit in fiscal year 2014, according to the PMA projections.
If general state aid remained the same, the district would have a slight surplus, Smith said.
The impact on the district would also be greatly felt if the state transfers its teacher retirement pension obligations to the local school districts.
Adding to the district's financial woes, according to Supt. John Harper, is the fact that Edward Hospital received a tax-exempt charitable status, meaing District 202 will have to pay back $1 million in taxes the hospital has already paid.
“The impact on a school district … is highly significant,” Harper said.
The district will also lose $250,000 in annual taxes the hospital once paid, he said.
“Our taxpayers are going to have to foot the bill for them becoming tax exempt,” board member Rod Westfall said. “It’s asinine.”
On Wednesday, Edward Hospital released a statement in response to school officials' comments, noting that the hospital has invested more than $100 million in the Edward Plainfield campus.
According to Edward, the hospital first began applying for tax-exempt status in 2008. While the state did not make a decision on the applications until 2011, Edward continued making its property tax payments, and District 202 received an annual notice regarding the hospital's request for the tax exemption.
"Edward Hospital & Health Services is a not-for-profit and has been for many years," Edward said in the statement, continuing,
We are also one of the largest employers in the region with more than 4,700 staff ... When the Edward Plainfield campus opened in 2008, Edward filed for property tax exemption for that parcel — and continued to re-file each year. Edward did the same for other parcels on its Naperville campus.
However, for the past few years the Illinois Department of Revenue did not act on those applications, or the vast majority of applications, until recently. Edward paid property taxes on parcels with pending applications for the years in question, as required by law, with the understanding that the money would be refunded provided that the tax exemptions were approved. We had every expectations that our parcels would be tax exempt, and each has subsequently been designated as such.
Each year when Edward filed its tax exemption application, we notified via certified letter each key taxing body in the county as required by law. There were also open hearings about our applications for property tax exemption at the board of review at Will and DuPage counties.
We closely followed the rules of the tax exemption process and provided full disclosure to taxing bodies that we were seeking tax exemption, which put them on notice that the money we had paid in taxes had the strong possibility o being returned to us after a decision by the Department of Revenue.
Edward has earned our tax exempt status by providing nearly $87 million in community benefit last year, including a generous charity care policy that exceeds the state's requirements.
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