Schools to have $10.38M deficit

By Harold Gwin

The district will have to go back to the state for another solvency loan by June 30.

YOUNGSTOWN — The city school district can expect to see a $10.38 million general fund budget deficit this fiscal year, which ends June 30.

That’s the latest estimate from the Ohio auditor’s office in a report Thursday to the state Financial Planning and Supervision Commission, which has been overseeing the district’s finances since the state placed Youngstown under fiscal emergency in November 2006.

The latest number is an improvement from the $15 million deficit incurred in fiscal 2007. Youngstown had to borrow that amount of money from the State Controlling Board in the form of an interest-free solvency loan to cover the red ink.

Half of that money is being paid back this year and accounts for about three-quarters of the projected fiscal 2008 deficit. The rest will be repaid next year.

In the meantime, Youngstown will have to borrow another$10.38 million from the state to end this fiscal year in the black, said Roger Nehls, chairman of the Financial Planning and Oversight Commission.

The projected deficit makes it clear the district still needs additional cash flow, he said, pointing out the importance of getting a proposed 9.5-mill, five-year tax levy approved by voters in November. Voters have turned the tax down three times. The levy would produce about $5.2 million annually in new revenue.

“The district is really biting the bullet with staff reductions,” Nehls said, referring to cuts made this year and additional staff reductions set for fiscal 2009.

The district already has cut 300 jobs and has proposed eliminating 140 more next year.

More cuts are still coming, but if the levy is rejected again, they will be deeper and likely have a disruptive effect on the district’s efforts to advance academically, Nehls said.

Youngstown is rated under academic watch in the state local report card program and is trying to advance to the continuous-improvement mark.

The audit report showed a beginning fund balance of $3.8 million for fiscal 2008 with revenues of $107,215,000, giving the district about $111 million to spend.

The expenditure side of the budget, however, shows a total of $121.38 million, leaving a deficit of $10.38 million.

The report noted that Youngstown will get $65.1 million in state student subsidy funds this year, about $1.6 million less than last year because of a loss of 322 pupils who chose to go to charter, open-enrollment or voucher schools.

Local real estate tax revenue will be down about $372,000 from last year to $16.4 million.

Major expenses include $51.7 million for employee salaries (down nearly $4 million from last year), fringe benefit costs at nearly $20.6 million (same as last year) and purchased services (utilities, charter school and other tuitions) at $34.2 million, down about $725,000 from last year.

gwin@vindy.com