[ back ]
Next school levy is on target for May
Next school levy is on target for May
By SUE HOFFMAN
The Solon School District is headed for an operating levy on the May 2010 ballot, school officials said Monday.
According to a five-year forecast approved by the school board, the district faces a deficit of over $9 million at the end of fiscal 2012 without the passage of a levy.
"Passage will be critical," School Superintendent Joseph V. Regano said. "This year and the next two years, we're fine, as long as the levy passes."
However, a 6.9-mill levy which voters approved in 2005, will produce approximately $350,000 a year less because of a lower tax valuation, Mr. Regano said.
In addition, he said, the school district must include such unfunded mandates as all-day kindergarten and a lower teacher-student ratio. All-day kindergarten, which is currently funded by tuition, will cost the district 0.5 mill, he said.
"We're going to need this levy and one three to four years later." Without more funding from the state, "we'll be back on the ballot in 2013," he said.
Mr. Regano said the district continues to be in the bottom third of districts in Cuyahoga County in levy millage. Issues involving loss of valuation "are countywide and statewide," he said.
The school board announced a meeting of the strategic planning finance action team at 7 p.m. Nov. 23 in the board conference room, 33800 Inwood Road. The meeting, which will focus on the financial forecast, is open to those who have been involved in the district's strategic planning as well as other community members interested in participating.
"A discussion needs to happen to have all the options on the table," Mr. Regano said.
In his forecast, school Treasurer Timothy Pickana discussed the many factors affecting the district's budget, including the state's elimination of tangible personal property taxes on businesses, the effect of the economy on the housing market and real estate taxes, and the dropoff of federal stimulus monies after fiscal 2011.
Mr. Pickana said that the district consistently has rated as one of the top academic public school districts in the state while receiving only 5 percent of its total operating revenues from the State of Ohio.
Helping to extend the current levy were expenditure reductions of $1.5 million in fiscal 2009 and $1.25 million in fiscal year 2010, he said.
"It will be increasingly difficult to provide an excellent education to Solon City School District students without additional revenues, as well as a reversal in the state's tangible personal property tax elimination," Mr. Pickana said.
The five-year forecast is a tool that's required by the Ohio Department of Education, he said.
In his forecast, Mr. Pickana predicts a shortfall of $9.33 million on June 30, 2012, without the passage of a levy in 2010. A 6.9-mill levy would generate an estimated $3.97 million in fiscal 2011 and $7.96 million in fiscal 2012, eliminating the deficit and raising the district's unreserved fund balance to $1.6 million on June 30, 2012, the forecast shows.
However, even with a new operating levy, a deficit of $4.1 million in fiscal 2013 and $17.67 million in fiscal 2014 is predicted when the state's reimbursement of phased-out personal property taxes drops some 50 percent.
The State of Ohio began providing reimbursement revenues when the phase-out of the personal property tax began in fiscal year 2006, Mr. Pickana said. "The revenue stream related to the majority of the 'old' tangible property tax revenues will be phased out 100 percent by fiscal year 2018. This will be a devastating impact on Solon city schools."
In 2004, tangible personal property tax revenues accounted for approximately 17 percent, or $11 million of the district's operating expenses, Mr. Pickana said.
The treasurer predicts stagnant real estate taxes because of the effect of the economy on housing valuation. The forecast shows real estate taxes of $42.48 million in the current fiscal year, $42.64 million in fiscal 2011, $42.96 million in fiscal 2012, $43.31 million in fiscal 2013 and $43.67 million in fiscal 2014.
"Fiscal years 2010 through 2014 project an average increase of 0.71 percent due to the current state of the economy," Mr. Pickana said. "The increase is primarily attributed to new construction. This line item's projected increases over this forecast period are perhaps the lowest projections in the history of Solon city schools. In order for projections to increase, a significant turn in the housing market is needed."
[ back ]