Monday, June 22, 2009
By Harold Gwin
Youngstown district officials said they should have a balance equal to two months of expenditures.
YOUNGSTOWN —The city school board’s finance committee wants the school administration to come up with an additional $2 million in spending cuts to help ensure the district’s financial health.
William Johnson, district treasurer, said Youngstown is on track to emerge from deficit spending in fiscal year 2011, which begins next summer.
His latest five-year forecast shows the general fund should end that year with a $7.5 million balance. It will be the first time since 2006 that the district takes in more than it spends without having to borrow money to make ends meet.
However, the district, which spends $9 million a month, should have a balance of at least $18 million, enough to cover two months’ of operation, to be considered financially healthy, he said.
To reach that level, the district would have to look at finding additional revenue or make additional cuts, Johnson told the committee.
Committee members Lock P. Beachum Sr. and Michael Murphy made it clear they’re not interested in any plan that would ask taxpayers for more money.
Come up with a list of additional possible spending reductions, enough to get a balanced budget and secure financial health, Beachum, committee chairman, advised Johnson.
“We have to have the mind-set that we’ll never pass a levy,” Murphy added.
An emergency five-year, 9.5-mill tax levy approved by voters last year will run only another four years, producing $5.2 million per year in additional revenue.
The district has made extensive cuts over the last couple of years, eliminating 450 jobs and about $26 million in spending as it works to get out of state-declared fiscal emergency.
Some $5.1 million in cuts and 77 job eliminations are planned for fiscal year 2010, which begins July 1.
The administration has done a good job making cuts in the past, and the district has to continue that approach, Beachum said.
“We’ll get you some more reductions,” Johnson told the committee, agreeing that $2 million will be the target figure.
His five-year forecast shows Youngstown ending this fiscal year with a $2 million fund balance, but that’s after the district has borrowed $5.2 million from itself and $3 million more from the state to balance the general fund.
That balance may not hold, Johnson said, noting that the Ohio Department of Education has warned the district that $1.7 million in state Homestead tax break reimbursement funds that were due the district in May might not come until after some time in July, after the end of the fiscal year.
“It may put us into the red,” he said.
Johnson has said the district, which has been in financial emergency since November 2006, shouldn’t have to borrow any more money in the future to balance its budget.
The spending cuts coupled with the five-year tax levy have been effective in revamping Youngstown’s finances, he said.
Overall, “We’re very happy with where we’re sitting right now,” he said.
gwin@vindy.com