Youngstown schools system facing bleak financial future

Four years ago this month, State Auditor Dave Yost officially released the Youngstown City School District from fiscal emergency, which the state had declared in 2006 because the system’s operating budget was bleeding red ink.

Yost came to town to make the announcement, which was greeted by a huge sigh of relief locally because it meant the disbanding of the financial planning and supervision commission. The commission, mandated by state law, took over management of the troubled district’s finances. Commissioners, in effect, stripped board of education members of the authority to spend money.

Therefore, release from emergency was viewed as the state’s yoke being lifted.

“This is very good news,” Yost said during his visit. “The five-year forecast looks strong. My staff is very confident that we won’t be back here any time soon.”

Well, the state auditor may have been swept up in the moment when he expressed such confidence in the district’s financial future, because now, there is nothing but bad news.

Consider this banner headline on the front page of last Tuesday’s Vindicator: “Youngstown schools eye $2 million in cuts.” Remember that one of the chief requirements for releasing the district from fiscal emergency was the preparation of a five-year financial forecast that showed a balanced budget each year.

An editorial we published in April 2011 to mark the end of emergency warned that the financial recovery was tenuous at best and that the system easily could collapse if the budget was not monitored closely.

The projected $2 million shortfall in next year’s spending plan is of major concern because of what it reflects: an urban school district with a declining student population in a city that is also shrinking.

EXPLORING OPTIONS

Superintendent Connie Hathorn, Treasurer James Reinhard and others are exploring options for dealing with the expected deficit, and topping the list is a change the employee health insurance plan.

The plan is self-funded, and claims increased 37.5 percent last year. Those covered have lower deductibles and lower out-of-pocket maximum costs than what would be considered the norm.

Hathorn and others believe a change in the insurance could wipe out the $2 million shortfall in the 2016 budget.

However, the unions representing the district’s employees would have to agree to switching, and that’s a huge hurdle. The administration has been negotiating with the American Federation of State, County and Municipal Employees since December.

On the other hand, the teachers union must agree to reopen its contract, which expires next year, so discussions about health insurance can proceed.

If that option fails to materialize, the district will be forced to look at closing buildings — it has excess space as a result of the enrollment decline — and cutting programs.

It would also have to consider reducing the payroll through attrition and not filling vacancies.

These are trying times for the Youngstown City School System, and Hathorn, his staff and the members of the board of education could certainly use a helping hand.

State Auditor Yost has staffers who have intimate knowledge of the district’s finances. They would be a valuable resource.

We have no doubt that Yost would jump at the chance to send in a team — if such a request were made.

The clock is ticking on the school district and without drastic action, state-declared fiscal emergency could become a reality — again.