Every Penny Counts
There’s something about a number when there’s a dollar sign next to it that makes people sit up and pay attention. Then take that number and say that’s what a school district will have to educate your children.
Now you know what it means to be a school superintendent in Lawrence County with a new governor and new budget philosophy on what the state should provide for public education.
“The effect is to impact the state assistance to districts so that the wealthy districts or districts with higher property values will drive down their funding,” Andy Jewell, a researcher at the Ohio Education Association, said. “They will get less in the category of state assistance. If you are in Upper Arlington or Westerville with less of their money coming from the state, they can generate it locally.”
In other words, the wealthy, often suburban, districts with a solid stream of money coming from high real estate values are supposed to pay for more locally and look to the state for less.
But will that play in the rural southeast of the state?
In Ohio school districts get their money typically from three sources: local property tax, state money and tangible personal property taxes assessed on businesses’ machinery, equipment and inventory. That last tax was eliminated during Gov. Bob Taft’s administration, but school districts have continued to get the amount of revenue they would have from the TPP from a state reimbursement.
But not any more, if Gov. John Kasich’s budget proposal is accepted. And that loss, plus the end of federal stimulus funds, means between a 2 percent to an almost 7 percent loss for the county’s districts.
For five of the seven districts in the county reimbursement stops in fiscal year 2012 — Chesapeake, South Point, Fairland, Symmes Valley and Dawson-Bryant. Of those five the biggest loser would be South Point that received $148,275 in fiscal year 2011, according to data from the OEA. The remaining four would lose between $56,000 and $80,000.
That leaves Rock Hill that would go from $350,762 to $52,409 and Ironton from $236,307 to $13,630 in fiscal 2012.
Add to the mix the end of federal stimulus funds and you have a number of superintendents looking at the prospect of making decisions they’d rather not.
To offset the loss of TPP and stimulus, right now Kasich is proposing increasing state assistance in 2012.
“The first year there will be small increases in this statewide assistance,” Jewell said. “You lost a dollar in local tax, the state said we will cover it for a portion of time.”
However, even with that state increase, each of the seven county districts is scheduled to lose overall, according to OEA data.
In Lawrence County as far as percentage drop in revenue the hardest hit is expected to be Rock Hill, whose superintendent shared what he sees in the near future for the district.
“We are looking at some pretty steep losses,” Rock Hill Superintendent Wes Hairston said. “It will result in program cuts. There will be layoffs, which will be pretty steep. There will be cuts on both areas. We don’t have an option at this point.”
It’s been more than a year since Hairston took over as leader of the Pedro-area school district that had been following a pattern of increasing staff with declining enrollment over the past decades. In the late 1990s enrollment there ranged between 2,150 and 2,100. Today that figure has dropped by about 400 with Rock Hill enrollment hovering at 1,650.
But Rock Hill’s financial woes can’t all be laid in the lap of the new governor. There have been several areas that have contributed to the situation Rock Hill is in. Over the past nine years the district’s food service has lost $3.4 million, Hairston said.
“We had to take that amount of money out of the general fund to supplement food service,” he said. “Most of it was overstaffing. Generally a food service will lose money. But we are talking five numbers, not six — $20,000 or $30,000. We were losing $500,000 to $600,000 (annually).”
Then add a preschool program that wasn’t totally funded from the state and health care premiums. Before the governor’s proposal was announced, the district had already cut $1.5 million from its budget and had wanted to make staff cuts through attrition, people retiring or leaving the district, the superintendent said.
“The thing with Kasich finished it off,” Hairston said. “When you look at food service, health care, preschool, declining enrollment. The extra money would have prevented some layoffs.”
Right now how much and where is the unknown in the equation.
“We are working on projections and will have that complete in the next week,” he said. “Frankly we are trying to be patient to see what the actual budget cuts will be, but be proactive.”
On the other end of the county is South Point; if the governor gets his wish, that district will lose about a quarter of million dollars in its fiscal 2012 budget, even with an increase in state assistance of about $725,000. Like other districts there is no stimulus or tangible personal property tax scheduled to go into the district’s coffers next year.
However, Superintendent Ken Cook doesn’t look at the current budget proposal as set in stone and is taking a wait-and-see approach before making any definitive cut decisions.
“I know there is a long way to go on that budget from now to June,” Cook said. “I don’t know if it will look the same in June. Some of the Republicans say it will look different. I don’t know what that means, whether better or worse.”
Cook wants to make budget cuts through attrition as much as possible.
“That doesn’t say we will very well have to make some cuts,” he said. “If we can do through people retiring, that kind of thing. … We will wait and see how to go and then make adjustments. If we have people leaving we don’t need, we haven’t been replacing. We have been (doing that) ongoing, looking at that for the last two or three years. Obviously with the governor’s proposal we may have to go deeper than going through attrition,” he said.
In March the governor’s education adviser, Robert Sommers, offered ways that districts could offset the future reductions in state aid at a town hall meeting in Columbus. At the heart of those ways was what Sommers described as the need to create more efficiency.
The three major suggestions were creating a regional service center where services among school districts could be shared; creating regional purchasing pools for districts to buy health insurance; and allowing more online classes for students.
These aren’t ideas new to Lawrence County.
“The purchasing pool for health insurance, we saw value in that 11 years ago,” Dr. James Payne, county board of education superintendent, said. “I think our purchasing power has increased by the numbers of our group. … We want to provide a responsible health care program, but at the lowest possible cost. That is why we saw the value. It has saved us millions and millions of dollars.
“One of the things that kind of concerns me is the idea you get into these regional service centers kind of approaches. Everybody thinks because you have something in Chillicothe, now Fairland two hours away to get the same kind of services an agency has to travel two hours away. We can do the same thing here at a much lower cost. This educational service center works with the districts in Lawrence County. We are held accountable by our school districts and they get a good return.”