Youngstown district to borrow up to $3.7M

By Harold Gwin

State subsidy funds are expected to be higher than originally expected.

YOUNGSTOWN — The Youngstown school board has voted to borrow up to $3,689,000 from the state so it can end this fiscal year in the black, but Treasurer William Johnson said the district probably won’t need that much.

The state has projected Youngstown will be $8,979,000 in the red as of June 30, the end of the fiscal year, in a general-fund budget of about $118 million, and the school district is taking two actions to eliminate that deficit, both of them involving borrowing.

The school board has already voted to borrow $5.29 million from itself with a tax-anticipation note against one year’s proceeds of the 9.5-million four-year tax levy approved by voters last November.

The money will come from the district’s own bond fund and be repaid at the rate of $1,340,000 a year for four years out of the levy revenue.

The rest of the deficit will be covered by the state loan of up to $3,689,000. It will be repaid over the next two years, but Johnson said Youngstown may actually only need to borrow between $1 million and $2 million of that amount.

The district has been carefully recalculating its student attendance counts and will wind up getting more money from the state in subsidy funds based on attendance than originally estimated, Johnson said.

The district has also updated its teacher training and experience data, which will also result in some increased state subsidy, he said.

Youngstown is now expecting just over $79 million in state aid this fiscal year.

The numbers are good, despite the borrowing, Johnson told the board.

Youngstown is working to get out of state-declared fiscal emergency imposed in November 2006.

The district has borrowed some $25 million from the state to balance its last two annual operating budgets and will repay the final $5.2 million of that debt in fiscal 2009-10.

Johnson said a combination of the passage of the four-year tax levy, a change in the way Gov. Ted Strickland intends to fund schools that will save Youngstown about $2 million in annual expenses and Superintendent Wendy Webb’s proposal to permanently cut $5.5 million in spending in fiscal 2009-10 should allow the district to eliminate all of the red ink by fiscal 2011-12.

gwin@vindy.com