Schools push for reprieve on debt

Hagan: State help for city district unlikely

By HAROLD GWIN

VINDICATOR EDUCATION WRITER

YOUNGSTOWN — The city school board isn’t giving up on its efforts to persuade Ohio to forgive all or part of the remaining debt it has incurred.

The board sent a letter to Gov. Ted Strickland a year ago that outlines the district’s difficulties in dealing with what began as a $15 million general-fund deficit in fiscal 2007.

At the time of the letter, the school district had borrowed $25.4 million from the state to cover that original deficit and an additional $10.38 million in red ink in fiscal 2008. Payback of those funds had started, and Youngstown still owed the state $18 million.

The district has since reduced that debt to $5.2 million but had to borrow an additional $3 million in solvency funds to close out fiscal 2009, bringing the debt back up to $8.2 million. The district has been paying back each loan at the rate of 50 percent per year. Each loan is thereby paid off within a two-year period, which means the $8.2 million will be paid off in fiscal 2011.

School officials, who have been cutting spending to help with the financial recovery, have said they don’t anticipate the need to borrow any more from the state.

Anthony Catale, school board president, said school officials have met with officials in Columbus on the issue of loan forgiveness, but the effort needs a local lawmaker to sponsor the appropriate legislation to make it happen.

“People need to know we’re still trying,” said Dominic Modarelli, a school board member.

Sponsorship has to come from within your legislative district, Catale said.

That task would appear to fall to state Rep. Robert Hagan of Youngstown, D-60th, whose district includes the city schools, but Hagan said state assistance with the loans is unlikely in Ohio’s current economic crisis.

Faced with a $3.2 billion deficit in the proposed biennial budget now being debated in Columbus, it doesn’t appear that Ohio can come up with any money to bail out the city school district, Hagan said.

“It’s just not possible for us to think of that,” he said.

Hagan said he would like to be able to help the city schools, but “it’s just not going to happen.”

“It’s not dead,” Catale said. “We’re hopeful that the state will consider our situation.”

Youngstown’s school district isn’t asking the state for more money but to forgive all or some of the remaining solvency-loan debt.

“We’re not asking for a bailout,” Catale said.

The district could be held up as the model that other districts would have to meet to seek solvency -loan forgiveness, Catale said.

“We’ve made sacrifices,” he said, explaining that the district has made $32 million in spending cuts over a three-year period, reductions that included eliminating 520 jobs.

School-district taxpayers helped pick up the burden by approving a five-year, 9.5-mill tax levy last year that is producing about $5.2 million a year in new revenue.

The district has done its part to cut costs and increase revenue as part of the recovery process, Catale said.

gwin@vindy.com