Wednesday, September 26, 2007
The district has begun to repay the $15 million
borrowed from the state.
By HAROLD GWIN
VINDICATOR EDUCATION WRITER
YOUNGSTOWN — A fiscal year 2008 forecast shows the city school district will be back in the red as early as January.
Carolyn Funk, district treasurer, handed the city school board a general fund cash-flow projection Tuesday that shows total revenue for the year at $109.5 million and spending at $119.4 million.
That’s a deficit of nearly $9.9 million for the year, but Youngstown started this fiscal year with $3.8 million in cash, the last of a $15 million state solvency loan to help cover a fiscal year 2007 budget deficit.
That borrowed money reduces the estimated 2008 year-end deficit to just more than $6 million, Funk said.
Her cash-flow projection shows the district will begin spending in the red in January, estimating the deficit at $1.7 million at that point. It will gradually grow to $6 million by the end of the year in June, unless additional spending cuts are made or more revenue is found, Funk said.
Board members expressed concern about spending levels, and Lock P. Beachum Sr. asked Funk to keep the board informed monthly on the general fund’s status.
It is possible to make that difference up, she told the board, adding that the alternative will be to ask the state for another solvency loan. The district has just begun making monthly payments on the $15 million loan, she said.
More spending cuts
Dr. Wendy Webb, superintendent, told the board she expects to have a plan of additional spending reductions to present to the board by mid-October, showing how Youngstown can balance its budget by 2012 without borrowing more money from the state.
That plan, however, will rely on the passage of a 9.5-mill, five-year tax levy in November.
The levy would produce about $5 million a year in new revenue. If it passes and goes into effect in January, the school district would realize about $2.5 million in additional real estate taxes in fiscal 2008, which ends June 30, Funk said, reducing the projected budget deficit to $3.5 million.
She pointed out that the general fund budget shows repayment of one-half of the state solvency loan — $7.5 million — in fiscal 2008.
If the district didn’t have that debt to repay, it could end fiscal 2008 in the black, Funk said.
The situation won’t improve in fiscal 2009, she warned the board, explaining that the other half of the state loan is to be repaid that year and the school district won’t start out with nearly $4 million in the bank.
The best Youngstown can expect to do in fiscal 2008 is to break even, even if the levy passes, Funk said.
gwin@vindy.com