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The Vandalia Board of Education on Monday approved a budget for the 2013-14 fiscal year that projects a deficit of $1.4 million in the four operating funds over which the district has spending discretion.
That budget shows revenues of $12,987,496 and expenditures of $14,393,736 for the fiscal year that began July 1.
The four operating accounts include education fund, operations and maintenance, transportation and working cash.
Of those four, the education fund is by far the largest, with budgeted revenues of $11,468,511 and budgeted expenditures of $12,589,435 – leaving a deficit of $1,120,924. The education fund includes salaries, benefits, purchased services and supplies.
Though the district still has a fund balance of $2.38 million, that surplus continues to shrink as it’s used to make up for declining revenues from the state.
The budget projects that surplus will be cut in half by the end of the current school year – dropping to $1.26 million by June 30, 2014.
“In two years, we’re going to be in the red in fund balances,” said Superintendent Rich Well.
“We’ve been blessed to have a couple years of surplus.”
But that is soon coming to an end. State funding revenues are drying up faster than the district can make cuts in expenses.
The state currently is funding General State Aid at 89 percent of the 2011 levels, and transportation funds paid to districts has been slashed to 69 percent of previous levels.
Well noted that the budget adopted Monday reflects a $309,155 decline in General State Aid because the district showed a decrease last year in average daily attendance.
An uptick of about 25 students in the district during the current school year, however, should help the district get more funding from the state next year.
Since 2011, General State Aid coming into the district has decreased by $1.8 million, according to district Business Manager Lori Meseke, who made the budget presentation to the board at Monday’s special meeting.
The result, she said, is that the district is receiving state aid of about $5,800 per student. If GSA was paid in full, that amount would rise to $6,119 per student.
Following the 30-minute meeting, Well said that the district is facing some tough decisions. It is now in the second year of a state-mandated deficit-reduction plan – a plan that requires districts with deficit spending to come up with a plan to correct the situation.
“In the past, our fund balances have taken care of the rainy days,” Well said. “They also helped us cover expenses during the summer months when we have no revenues coming in.
“But our fund balances are going fast.”
Between now and next spring, Well said, the administration will be seeking grants to augments state funding and also looking at options to reduce expenses.
“The cuts we made last year were just a portion of what we need to do,” he said. “We probably will have to make more tough decisions this year.”