Salem schools to cut costs by $1 M

School officials thought the district’s finances were in good shape.

By D.A. WILKINSON

VINDICATOR SALEM BUREAU

SALEM — City school officials will meet next month to begin making nearly $1 million in cuts.

The board of education met Friday to look at the district’s finances.

“We have to make cuts,” said board president Elizabeth Thatcher, who added, “It has to be done.”

Voters in May 2006 approved a 4.3-mill levy that would bring in $1.3 million for five years.

The district thought its budget woes were over. The district made some cuts, such as closing older schools, but reinstated some planned cuts that were planned if the levy failed.

Now the district finds itself about $880,000 in estimated debt for the 2007-08 school year.

The district has passed a $7 million temporary appropriations measure for part of the next school year. The district spent $17.5 million for the 2006-07 school year.

What changed

The district’s financial picture changed because an insurance consortium that included Salem and other county school districts has closed. It had been carrying over $400,000 a year in district bills that now must be paid.

The district has joined a new school consortium to get insurance, but the district’s premium is 35 percent higher, according to district Treasurer Jill Rowe.

The district has a top-of-the-line insurance, and heavy usage because of some major illnesses.

The district also has declining enrollment. It is losing about 50 students a year under the open-enrollment program. Each departure costs the district about $5,500 a year in state aid.

District Superintendent Stephen Larcomb said he will bring recommendations to the board at the July meeting.

Under state law, the district cannot run in the red.

The district earlier this week received a performance audit that suggests various ways the board can cut services or increase revenue to save about $1 million a year.

wilkinson@vindy.com