Open enrollment declines, stable tax base to blame for projected deficit

By JUSTIN DENNIS

jdennis@vindy.com

AUSTINTOWN

The Austintown Local School District has maintained a balanced budget since the 2015 fiscal year, but a projected decline in enrollment and stagnant tax-base growth could cause the district to start deficit spending in the 2020 fiscal year and chew through a $9.3 million surplus, school officials say.

During a late October meeting, the school board accepted a new five-year forecast developed by Treasurer Ryan Ghizzoni, who joined the administration in July, which shows the district will enter 2022 in the red.

The district predicts about $46.1 million in revenue for fiscal year 2019, decreasing steadily to $40.4 million by fiscal year 2023, with expenditures increasing from $45.5 million in fiscal year 2019 to $52.6 million in 2023.

The forecast indicates more students are choosing to enroll outside the district. The district will spend more for those students by paying nondistrict personnel for services, from $1.9 million spent on 326 open-enrolled students in 2016 to a projected $3.1 million to be spent on 503 students in 2023.

Also, there has been little change in property-tax revenues from last year, even though it was a tax revaluation year.

“There’s not been much new construction, which would drive what little growth we had,” Ghizzoni said. “[Open enrollment] has been declining for the last two years. It’s declined this year, and we’re projecting a decline each year moving forward through 2023. ... Residents choosing to open-enroll in other districts has increased at a faster rate than we’ve seen in the past.”

Though the district has had state education funding for each student guaranteed since last year, the state’s recent biennial budget reduced guarantees for schools with declining enrollment of more than 5 percent. Open enrollment into the district dropped 5.5 percent this year, according to the forecast.

“I think one of our highest priorities now is to attract resident students and to retain them,” Ghizzoni said.

But there are bright spots in the financial outlook, he said. The district’s income on investments rose from about $20,500 in 2016 to $156,000 in 2017. Ghizzoni said administrators are confident it will reach $400,000 by next year.

The district has not passed a new operating levy since 1996. Its 7.3-mill, five-year levy, which is up for renewal in 2022, generates just more than $5 million annually, Ghizzoni said.

“We’ll always evaluate,” said schools Superintendent Vince Colaluca. “But we can’t deficit-spend. We also don’t want to live off that [carryover] because it goes away really fast. We need the excess to buy safe buses. We need the excess dollars to provide the extracurricular and nonathletic events we do.”

The district will continue to revisit the forecast monthly – with updates appearing on the treasurer’s page on the district website – and will file an official update to the forecast with the state education department in May 2019, Ghizzoni said.