Youngstown school system offers a teaching moment

Just about every public sector entity in the Mahoning Valley is facing, or will soon face, a financial meltdown because of the national economic crisis. Full recovery will take years, and that means declining tax revenues and less money for all government institutions.

The only option is to reduce expenditures. With 80 percent of most operating budgets going for employee salaries, wages and benefits, it is obvious that personnel must take the hit.

It’s not easy to do, but as the Youngstown City School District is showing, where there is a will, there is a way to fiscal stability. The will, of course, is being driven by a state commission that has been overseeing the district’s finances since 2006. That’s when the state declared Youngstown to be in fiscal emergency.

It has been a difficult three years, but the light at the end of the tunnel is beginning to be brighter. Last week, district Treasurer William Johnson presented a new five-year fiscal projection which he declared to be “a very positive forecast.”

What the Youngstown school district experience has shown is that a reduction in spending is possible without the system collapsing.

Consider: In the 2005-06 fiscal year, the district paid $60 million in salaries and wages, while this fiscal year the tab is $45.8 million. There also has been a reduction in fringe benefit costs from $23 million to $19.6 million during that period.

But the most significant move by the school district has been the elimination of 450 jobs over the past two years.

The private sector has been making such difficult decisions for a number of years, and the public sector is only now beginning to face economic realities.

Business as usual is no longer an option.

Wage concessions

Indeed, concessions must be a major element in any cost-reduction program. The public is demanding sacrifice from employees who have been fortunate over the years to have job security, above-average compensation and pension plans far better than those in the private sector.

Even with all the cuts that have been made by the Youngstown Board of Education and the administration, the uncertainty of the national economy means that the paring knife may still be needed.

With the state fiscal oversight commission looking over the shoulder of the decision-makers in the district, there is no doubt that additional spending cuts will be made if they are needed.

Other public sector entities may not have such an incentive to face up to today’s economic realities, but sooner rather than later, taxpayers will demand the kinds of actions that have been taken by the Youngstown City School District.

The focus now shifts from the Board of Education to Youngstown City Hall, where Mayor Jay Williams has warned that he needs concessions from city workers to address a projected $3 million deficit. Otherwise, there will be layoffs.

The mayor has agreed to a 10 percent pay cut. The rest of city government’s workforce should follow suit.