Stimulus brightens district’s outlook

By Harold Gwin

Youngstown’s state aid will jump by $3.3 million, thanks to federal stimulus money.

YOUNGSTOWN — Federal stimulus funds channeled through the state will enable the city school district to end its deficit spending sooner than expected.

If projections hold, the district could break even by the end of this fiscal year, June 30, 2010, Treasurer William Johnson told the school board Tuesday.

Earlier projections had Youngstown exiting deficit spending by the end of fiscal 2011.

Youngstown was placed in state fiscal-emergency status in November 2006 after the district announced it was running a general-fund deficit.

Since then, the district has cut about $32 million in spending, and voters have approved a five-year, 9.5-mill emergency tax levy that is generating about $5.4 million a year in new revenue.

Johnson said state aid for this year will amount to just over $84.6 million. That includes about $3.3 million in federal stimulus funds channeled through the state, he said.

Last year’s state allocation totaled just under $81.3 million, and, until very recently, Youngstown didn’t know if it would get any additional state funds this year, Johnson said.

The state had indicated the stimulus increase could reach about $4.5 million, but that figure would be dependent upon Youngstown’s not losing any more students this year.

However, state and local projections estimate that Youngstown will lose an additional 400 students to charter, open-enrollment and voucher schools this fall.

Johnson said he is budgeting the $3.3 million increase instead of the larger number to reflect that potential loss.

Still, the additional money should be enough for the district to break even, despite having to repay nearly $6.7 million in state solvency loan funds and nearly $1.4 million the district borrowed from one of its own funds to make ends meet in fiscal 2009, which ended June 30.

That borrowing left the district with a beginning balance of $1.3 million for fiscal 2010, which began July 1.

Total revenue for this year, in addition to that beginning balance, will reach $114.6 million, and total spending will reach $112.6 million in Johnson’s financial forecast.

That $2 million difference, combined with the beginning cash balance, shows Youngstown with a $3.3 million ending cash balance for 2010.

That’s more than the $2.84 million debt the district must repay in fiscal 2011 on the last installment on its state solvency loans and the second installment on its loan from its own fund.

Johnson said there are no plans to borrow any more money to balance the budget.

Anthony Catale, board president, said the school board is still looking at trimming an additional $2 million in spending in fiscal 2011 to ensure that the district will be financially strong enough to avoid a return to deficit spending once the five-year levy expires in fiscal 2013.

gwin@vindy.com