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QUINCY, ILL. -- Quincy School Board members say they're looking at what the state calls a balanced budget.

The board approved the 2012-13 budget in a special session Wednesday morning.

The total budget came in at $77.2 million, which included an expenditure of about $7.79 million in self insurance funds.

The overall revenue for the district's operational funds for this school year shows a positive balance, at $68,139,263. But the district's overall projected expenditures totaled $69,415,008. That puts the operational budget in the hole by about $1.2 million.

QPS Business Manager Joel Murphy says much of the school's deficit comes from lack of state funding.

"This budget reflects the fact that the state won't pay us the full payments. We actually went back and researched what we were getting from the state on an annual basis, how much was coming in previous years, how much it was in the current year. So we based this budget on what the state owes us from last year and anticipating what they'll wind up paying this year," Murphy said.

The operational fund supports the areas of education, transportation, building and working cash bonds. Two areas show an individual deficit.

Murphy says the district was forced to cut the transportation budget due to lack of state funding and money currently owed to the school.

Murphy said the school's building budget also shows a deficit, due to the school's transfer of $350,000 into the capital projects fund, a requirement by the state for use of large capital projects.

Those projects included the driveway improvement at Quincy Senior High School as well as a future parking lot expansion project there. The funds would also go toward fire alarm replacements at the former Irving Elementary School and replacing a freezer at Adams Elementary School.

In previous years, these funds would have come straight out of the school's building fund, but the state now wants to account for them in a separate fund.

"I think the hardest hit fund was the education fund in trying to meet the deficit reduction goals and trying to keep the projected expenditures within the projected revenue.That's probably the most difficult thing to do. That's basically what caused us tell the principals a couple weeks ago that they were going to lose twenty percent of their supplies purchase accounts to keep those expenditures underneath the revenue," Murphy said.

The QPS budget was revised after being introduced in August. By state law, the board had to adopt the budget by the end of September.