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Janesville School District projects $3.5 million budget deficit smaller than expected

JANESVILLE — The Janesville School Board has been worried for months about a budget deficit that could be as high as $10 million. But the administration announced Friday that the budget gap will be a lot less.

Projections now show a deficit of $3.5 million for this year’s budget. The board is expected to discuss the information when it meets Tuesday night.

Officials last fall estimated a shortfall of $8 million to $10 million. Since then, the administration has avoided any updates on the total in an effort not to repeat 2011, when painful budget decisions generated controversy.

How the budget hole will be filled is unknown, although board President Bill Sodemann has suggested that the discussion will focus on how to use undesignated money from the fund balance.

The board can’t raise property taxes to fill the hole. The maximum tax allowed this year is $28.7 million, which is $1.8 million less than last year’s levy.

If the board taxes to the max, the average Janesville property valued at $112,000 would see a tax reduction of $34, according to a district news release.

The board has not yet discussed whether it will tax to the maximum. However, the deficit estimate of $3.5 million is based on the assumption that the board will do so.

If the board taxes to the max, it will receive an additional increase in state aid of $50 per student, which amounts to $498,450 if enrollment does not change.

The tax projections could change, however, according to a memo from district Chief Financial Officer Keith Pennington. The state’s final tax and aid amounts won’t be known until Oct. 15.

A variety of factors led to the projected decrease in the deficit, according to a district news release. They include:

--$500,000 from an increase in new students entering the district through open enrollment and an increase in Medicaid payments for district services to students.

--$2 million from positions that were not filled last year.

--$2.3 million increase in state equalization aid.

The district’s projected operating expenses this year are $113.1 million. Projected revenues are $109.6 million.

Major expense increases are salary bumps for unionized employees and a 5 percent rise in health insurance cost.

Teacher salaries are expected to increase an average 2.7 percent. Other unionized employees will see an average 2.1 percent increase. Non-union employees will see no increase for the second year in a row.

The district had been looking at a 12.5 percent increase for health insurance but switched providers to achieve the 5 percent result.

The board has three more regular meetings before it must make its final budget decisions.

Full budget details are scheduled to be released Oct. 5. A public hearing on the budget is scheduled for Oct. 9. The board must set the tax levy and adopt the budget by Nov. 1.

On the agenda

The Janesville School Board meets at 6:30 p.m. Tuesday at the Educational Services Center, 527 S. Franklin St. Agenda items include:

--Adoption of “guiding principles” for the creation of an employee handbook, which will take the place of union contracts starting July 1, 2013. The principles contain no details about changes to employee benefits or working conditions. Some details are expected this fall.

--Presentation and approval of district goals and the superintendent’s goals for this school year.

--Presentation of this year’s $1.75 million technology budget, which is unchanged from last year.