YOUNGSTOWN SCHOOLS Scholarship fund to trim deficit

Enough interest has been earned to fund scholarships for several years.
By HAROLD GWIN
VINDICATOR EDUCATION WRITER
YOUNGSTOWN -- A $3 million scholarship account set aside by the city school board four years ago is gone, a victim of the district's current financial plight.
The board of education voted this week to remove that money from its "restricted" status so it can be used to help offset a budget deficit.
Without it, the district is looking at a $7 million deficit as of Friday, said Treasurer Carolyn Funk. With it, the projected deficit is down to about $4 million, she said.
The district got the money from the sale of some Anthem stock, and the school board initially wanted to set up a nonexpendable scholarship trust fund to provide college aid to minority students who want to become teachers.
The Ohio Auditor's office said, however, that only money from an outside source could be put into a trust fund, although the $3 million could be placed in the general fund with a "restricted" designation, earmarking it for a scholarship program.
The board followed that advice, retaining the authority to remove the restricted status and use the money for other purposes if necessary, Funk said.
"We've got no choice," said board member Lock P. Beachum Sr.
Funk said the account has earned about $40,000 in interest, and that money will still be used for scholarship awards for the next several years, but the principal will be gone with this school year.
Transfer of revenue
In another move to reduce the size of this year's deficit, the board voted to transfer revenue from 0.75 mills of property tax revenue from the district's school rebuilding program to the general fund, a move that will give the district $500,000 more in cash.
The revenue has been set aside since 2002 to help cover the cost of locally funded initiatives, which are projects the district wants to put into new or renovated buildings but the state won't help finance.
That cost was initially estimated at $2 million for things such as an auditorium at the new East High School now under construction and renovations to the auditorium at Chaney High School.
Funk said the district has been able to bankroll $1 million more than appears to be needed for locally funded initiatives at this point, allowing the board to move that revenue source into the general fund.
The budget deficit is still expected to reach around $4 million, however, she added.
gwin@vindy.com