Schools trying to stem losses
- Published: June 2, 2011
According to the Yellow Springs school board, due to the cumulative effect of the budget reductions the district instituted this spring, the five-year budget forecast through 2015 looks slightly better than it did last fall. But the overall trend of expenditures exceeding revenues persists. At their meeting on Thursday, May 12, school board members approved the semi-annual budget forecast, which shows increased annual deficit spending and flat revenues over the next five years.
According to the official forecast prepared by District Treasurer Dawn Weller on May 12, the district will spend $636,000 in excess of revenue this year, higher than the $440,000 predicted in the previous five-year forecast last October. And according to the current budget, deficit spending is expected to increase to $791,000 next school year and rise each year to just over $1 million by 2014, an increase of about 65 percent over five years. Although the district is spending more in the first year of the forecast, it will be spending less overall after five years.
Meanwhile, annual revenues are down by about $150,000 from the October prediction, and are expected to remain flat at least through 2015.
Several board members voiced concern over the budget picture during the meeting.
“We’re spending about $900,000 per year more than what we’re taking in — that’s sort of the train wreck,” school board Vice-President Benji Maruyama said.
The $437,000 annual spending cuts the district instituted in March did make a dent in the growing deficit, which is reflected in this month’s forecast. The cuts included nonrenewing contracts, the retirement of six teachers, new educational services contracts, and other measures. The cumulative effect is a less severe negative cash balance of $395,000 beginning in the 2013–14 school year, compared to the almost $1.2 million negative balance in 2013–14 predicted in the October 2010 forecast. But the district’s current cash balance of $2.1 million is still expected to be spent down to zero over the next two and a half years.
Adding to the budget problems is declining revenues from the state, which were deeper than predicted in October. Ohio has accelerated its phase-out of tangible personal property tax reimbursements, which in 2011 brought the district $339,000, and by 2013 will be zero, Weller said.
The state funding loss will affect the district’s property tax allocation, which is expected to decline from a high of $842,000 in 2010 to a predicted $514,000 in 2014. Overall, over the next five years, the total general fund revenues of about $7.8 million this year are expected to drop by 13 percent to about $7.1 million by 2015.
The effect of lost state and tax revenue could be mitigated by an anticipated increase in property tax valuations, which are scheduled to be updated this year and reappraised in 2014. There was also a small uptick in this year’s first quarter income tax revenue, which is 7 percent higher than last year’s first quarter earnings. Weller was happy about the income tax increase, but noted during the meeting that the projected increase over the next five years would still be less than income tax revenues in 2007 and 2008. Superintendent Mario Basora agreed.
“After these (income tax) increases we still don’t get to the 2008 level, and meanwhile, expenses keep increasing,” he said.
While Basora noted during the meeting that new revenue generation has not been fully explored, district expenses are expected to continue to rise. Even considering this past year’s reduction in force and assuming zero percent raises for the coming year, the projected drop in expenditures does not equal the expected loss in revenues.
In other school board business:
• The board approved a $62,000 bid by Tecta America for repair of the roof at Mills Lawn School. The funds will come out of the permanent improvement levy, not the general fund budget.
• The district plans to release the results of its district-wide evaluation survey in the next few weeks. According to Superintendent Mario Basora, the initial data shows a significantly higher rate of positive feedback for Mills Lawn than for Yellow Springs High School. The survey was completed by school staff, students, parents and community members over the past month and a half.
• The district’s Class of 2020 strategic planning initiative has nearly completed its first round of interviews and small discussion groups between school community members. The steering committee and Wright State University’s CUPA representatives plan to use the data collected to design a community-wide survey. The group will also hold a community forum in the next month.
• The board approved a one-year limited contract for aide Jessica Dysert at $10 per hour.
• The board met in executive session for one hour prior to the public meeting to discuss personnel and employee contract issues.
• The board agreed to cancel the second meeting of the month.