City schools need levy to end deficit by 2012

By Harold Gwin

The administration and board continue to look for ways to reduce spending.

YOUNGSTOWN — The latest version of the city school district’s five-year financial forecast shows it could be out of deficit spending by 2012 — if voters approve a 9.5-mill tax levy in November.

Without the levy, the district’s deficit will stand at $15.3 million in 2012.

William Johnson, district treasurer, presented both versions of the forecast to the school board’s finance committee before Tuesday’s regular board meeting.

He said the second scenario shows a continuing deficit despite the spending cuts already made by the district. Youngstown has cut spending by $26 million, largely by eliminating some 450 jobs since the state placed the district in fiscal emergency in November 2006 when the city schools faced a $15 million general fund deficit.

The district borrowed $15 million from the state’s solvency loan fund to cover the red ink.

Johnson said the forecast includes the borrowing of an additional $10.38 million in solvency loan funds for this fiscal year, which ends June 30, and he pointed out that more borrowing will be required to cover anticipated deficits of some $9 million in fiscal 2009, $8 million in 2010 and $2.6 million in 2011.

The state loans are interest-free, but each must be repaid over a two-year period, causing further cash-flow problems, Johnson said.

“If we weren’t paying back the loan, we’d be fine,” he said.

“We won’t be able to pay this [deficit] off without a levy?” asked committee member Lock P. Beachum Sr.

That’s correct, Johnson said — noting that it will still take until 2012 to fully recover, even if voters approve a levy this fall.

Voters have already turned down the same levy amount twice.

The school board has yet to determine the size of the November levy, although the 9.5-mill figure, which would generate about $5 million a year in new revenue, is the likely amount. It would remain in place for five years.

Johnson said the district could come out of deficit spending in 2011 if the levy was at 10 mills.

Beachum pointed out that additional spending cuts could have that same result.

Johnson said that would require trimming an additional $2.5 million in spending over the next two years.

“There are no sacred cows. We have to look at everybody,” Beachum said of the school board’s ongoing effort to reduce costs.

He noted that people have expressed concerns about the board’s looking for ways to cut transportation and food service. Schools Superintendent Wendy Webb has said repeatedly that additional cuts are coming. Those include closing several buildings, ending the lease of the district’s bus garage, sale or lease of the central office building and more.

gwin@vindy.com