State oversight commission approves change in Youngstown school levy

By Harold Gwin

The commission chairman said cuts must still be made even if the levy passes.

YOUNGSTOWN — The state fiscal oversight commission that is controlling city school district finances has endorsed the city school board’s plan to ask voters to approve a new four-year, 9.5-mill tax levy in November.

The school district has tried unsuccessfully three times to win voters’ approval for a five-year, 9.5-mill levy, but opted this week to ask voters to accept a shorter-term tax package.

Youngstown has been in state-declared fiscal emergency since November 2006, when the district began running a general fund budget deficit that reached $15 million in 2006-07.

The declaration resulted in the appointment of a five-member Financial Planning and Supervision Commission to control district spending, and the commission has said repeatedly that Youngstown needs an influx of new revenue to help it return to fiscal solvency.

The district has cut some $26 million in annual spending and eliminated about 450 jobs but can’t cut its way out of debt, the commission has said.

The commission voted Thursday to support the school board’s bid for a four-year levy that will produce about $5.3 million a year in new revenue, but Roger Nehls, chairman, cautioned that the financial projection used by the board to determine the size and length of the needed levy implies additional cuts will have to be made.

The projection shows the district coming out of the red in 2012, but falling back into deficit in 2016, unless more spending is cut.

School officials are aware that additional reductions will be needed and are working on those plans now.

The school board estimated that another $2 million in annual spending must go if the district hopes to avoid returning to deficit spending in 2016.

If the district can run five consecutive years in the black, the state will likely withdraw its fiscal emergency status designation, Nehls said.

Youngstown has borrowed $25 million from the state to balance its budgets the last two years and still owes $18 million of that debt which must be repaid over the next two years.

gwin@vindy.com