Stateline Schools' Financial Lessons

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Belvidere school leaders will dip into their savings to save sports and clubs next year. Many fear that will cost the district its economic stability. Spending from savings has cost Rockford schools dearly.
Students' elation that they'll get to keep playing sports and musical instruments next year was tempered at Monday night's school board meeting by the potential economic strain ahead.
In order to operate two high schools with two sets of after-school activities, Belvidere will have to spend $2.2 million dollars next year from it's savings of about $14.5 million. Deficit spending is something Rockford schools have all too much experience with.
"It's no different than in your personal life if you start living off of credit, consumer debt, eventually you not only have to reign back in to what your standard of living can afford, but you also have to pay back the debt so it gets really difficult once you go start that road," says Tom Hoffman, Rockford schools' chief operating officer.
Due to increasing costs and a lack of new revenue, Rockford schools had to spend from their savings from the mid-90s until 2005. They accumulated a total deficit of about $48 million. Last year was the first time since the mid-90s rockford's education fund had a surplus, with $6 million in the bank. The operations and maintenance fund is still $14 million in the hole.
That is a scenario the Belvidere school board fervently wants to avoid. But to be sure they only deficit spend for one year, the district will have to pass a referendum in February '08, otherwise those budget cuts could come rolling around again.
"We have a tough time passing referendums in this community and we're going to have more that are going to be coming and in four years or five years, i want to be able to continue to have sports and everything else," says Belvidere School Board Member Doug Smiley.
Smiley was the only board member to vote against the plan adopted Monday. He supported Superintendent Don Sclomann's suggestion instead to operate with the newly constructed and larger Belvidere North as the district's only high school and sports team, until a referendum passes. That route would have meant much less deficit-spending.
In addition to spending from its savings, Rockford schools had to cut $16.5 million from their budget several years ago. The district even had to move from a seven period day to six. Many feel education still suffers from that move.