District’s payments may be delayed

By Harold Gwin

A delay in receiving state Homestead reimbursement funds could cause a year-end squeeze.

YOUNGSTOWN — The Youngstown City School District treasurer said the district may have to delay payments into its workers’ compensation and health-care self-insurance fund by a month to balance this year’s general-fund budget.

Youngstown already has borrowed $5.2 million from its own school building bond fund and an additional $3 million from the state solvency loan fund to make ends meet for fiscal 2009, which ends June 30.

Treasurer Bill Johnson’s financial forecast presented to the city school board Tuesday shows that should leave the district with a fund balance of slightly more than $2 million, but a delay in receiving state Homestead Tax break reimbursement funds could make it difficult to still end the year in the black.

Anthony Catale, board president, asked Johnson if that fund balance included the anticipated Homestead funds.

Yes, Johnson said, explaining that Youngstown was due to receive $1.7 million in Homestead funds in May, but an apparent delay in the filing of Mahoning County tax data with the state has resulted in the Ohio Department of Education warning that the money might not arrive until some time in July.

That would leave the district with a cushion of just $300,000 in a $118 million budget, he said.

There are people in Columbus working on Youngstown’s behalf to get the Homestead funds released by the end of this month, but, if that doesn’t happen, there are steps Youngstown can take to cover any unforeseen expenses that might exceed the $300,000 available, Johnson told the board.

The district could delay its June contributions into its workers’ compensation and self-insurance health-care funds by a month, he suggested, noting that would put between $1.4 million and $1.5 million temporarily at the district’s disposal.

The Homestead money would be forthcoming in July, and the district could then double up on its July contributions to those two funds, he said.

Ohio’s Homestead program gives homeowners age 65 or older or those permanently disabled a break on their property taxes, allowing them to shield up to $25,000 of the market value of their home from local taxation. The state then reimburses the local taxing bodies for that revenue loss.

The state placed Youngstown in fiscal emergency in November 2006 after the district announced that it was running a budget deficit.

Since then, the district has implemented some $26 million in spending cuts and plans to cut another $5 million in 2009-10.

Johnson has predicted the district will be out of deficit spending in fiscal 2011, but the school board’s finance committee has instructed him to come up with an additional $2 million in spending reductions by that time to ensure the district won’t slip back into the red two or three years later.

gwin@vindy.com