CADIZ The Harrison Hills school board heard its five-year forecast last week, and District Treasurer Roxanne Harding noted that the last two years of the forecast predict a deficit.
While the district has made good financial decisions, new laws and decisions at the state level has made it difficult to formulate long-range forecasts or plan revenue allocations.
"Our previous reductions have helped to make a positive impact for our forecast, but it's very apparent we've had some things hurt us," she noted that Ohio is in the last year of a biannual budget and this forecast has two unknown biannual budgets. "We're going to have to continue operating conservatively and keep an eye on our state budget."
She reviewed the district's efforts in maintaining stability during a turbulent time statewide.
"Our district forecast in all honesty it does not look bad," she said. "There are so many unknowns and variables that could change between now and three fiscal years out. It really is like rolling the dice. What are you going to assume when you have no guidance out there?"
The revenues will exceed expenditures through 2012, with expenditures beginning to meet and gradually exceed revenue starting 2013.
Contributing factors include the elimination of tangible personal property tax last year, even though it had been expected to continue until School Year 2018. This meant the loss of $1.3 million from the district.
In 2012 the state had also given stabilization funds, which have since been diverted to balance the state budget. That $4.8 million was also lost.
"We've lost $6.1 million beginning last year, and it would have made a dramatic impact on our forecast had that not occurred," Harding said.
She pointed out the ending cash balance. On Fiscal Year 2014 the unencumbered balance is expected to begin lowering. By Fiscal Years 2016 and 2017 the district is expected to be in a deficit.
Harding noted that the general fund has a large dependence on the state, which is 63 percent of the revenue.
"That's our foundation money," she said, adding that the Ohio Department of Education has not as yet put out any new funding mechanism for school district after this year. "They're not even giving us a hint, a glimpse, a whisper of what it may even look like. We haven't a clue. I have never seen anything so hush-hush as this."
She added that the model had been expected to be in place July 1, 2012 so district could have time to plan.
"We do not know how they are going to be funding schools. There are several things that could happen," she said, adding that that state is currently using 2009 numbers. Should they launch next year with 2012 numbers, Harrison Hills and almost every school district across the state will be impacted negatively.
The state's new deadline is June 30. She said the districts are concerned they will have no time to prepare before the announcement.
"That is a potential risk to us," she said.
Until more information becomes available, revenue projection will remain flat.
The district's largest expenditures are in the form of wages and fringe benefits, but Harrison Hills is holding at 67 percent while many other districts in Ohio are 75-80 percent.
"We're doing really well to maintain that and to operate our schools as efficiently as we can," she said, adding that general fund expenditures are expected to continue a gradual rise.
The district expects a slight increase in assessment values, but Harding said they cannot know for certain what the impact of oil and gas interests will be on the tax duplicate. The state is still working on classification and taxation methods.
Also, should a well begin producing in 2012, it will not be recorded until June 2013, and the district would not see revenue until February of 2014.
In terms of property values, there has been some additional construction in the county.
Harding noted that the district's last operating levy occurred 1991.
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