Youngstown schools to be hit with shortfall of $2.2M per year

By Harold Gwin

YOUNGSTOWN — The four-year emergency tax levy passed by city school district voters one year ago to help the district get out of fiscal emergency was supposed to produce $5.3 million in new annual revenue.

It’s not, said William Johnson, district treasurer, estimating the new revenue at $3.1 million.

That’s a shortfall of $2.2 million a year, or nearly $9 million over the life of the 9.5-mill tax levy, he said.

“Our taxes are eroding,” Johnson told the school board’s finance committee Thursday, explaining that a lot of people just aren’t paying their property taxes.

The decline began before the emergency levy was passed, he said, pointing out that real- estate taxes produced $16.8 million in revenue in fiscal 2007 and dropped to under $16.3 million in fiscal 2008.

The number is projected to be $19.3 million this year, but it should be closer to $21.5 million, Johnson said.

The poor economy is having its effect. People are having a difficult time paying their property taxes, he said.

Property-tax delinquencies in the district now stand at $9 million, Johnson said.

The district’s five-year financial forecast shows Youngstown emerging from deficit spending in fiscal 2011, but, with the tax delinquencies and levy-revenue shortfall, the district could be back in deficit spending by fiscal 2013 as the levy expires, unless the school board asks voters to renew it, he warned.

Another funding alternative would be additional financial support from the state, but there is no guarantee the state will be increasing aid to schools, Johnson said. Ohio has its own budget problems, and, as it stands now, is tapping federal stimulus dollars to cover part of its commitment to schools.

In Youngstown’s case, the state is committed to some $81 million annually but is contributing only some $77 million. The rest, about $4.3 million, is federal money channeled through the state. Unfortunately, that stimulus money will disappear after fiscal 2011, and there has been no indication from the state as to how it will make up that money, Johnson said.

Lock P. Beachum Sr., finance committee chairman, said the district will have to look at more cuts to keep its general-fund budget of about $110 million balanced.

“We just can’t go back to the voters,” he said, telling Johnson, “I’m looking for you to give us some options.”

Youngstown has been in state-declared fiscal emergency since November 2006. Since then, the school board has cut spending by some $32 million, primarily through the elimination of about 500 jobs.

gwin@vindy.com