Levy failure would force big loan

School officials will hold an open forum on the levy at 5:30 p.m. Wednesday.
YOUNGSTOWN -- Should voters turn down a 9.5-mill school levy Nov. 7, the city school district will have to borrow between $9 million and $9.5 million from the state to keep operating this year.
The Youngstown Board of Education is asking voters to approve the five-year tax plan that would generate about $4.1 million a year in new revenue to help the district recover from a budget deficit.
Not all of the levy would go for operating expenses. One mill would be set aside for permanent improvements, such as new school buses.
The board and administration will hold an open session on the levy and any other issues that come up at 5:30 p.m. Wednesday in the second-floor board room of the Wood Street administration building.
The district ended the last school year June 30 about $2 million in the red and school officials have said that deficit will grow, despite extensive cuts that are reducing spending this year by about $8.5 million.
Plans to cut spending
The district already has plans in place to cut spending by another $14 million over the next several years but those cuts can't be implemented in time to deal with the current deficit, which could grow to nearly $8 million this year.
Getting the levy passed will cut this year's deficit to around $5.6 million and eliminate the red ink by 2010, based on the district's five-year forecast. The district will still have to borrow some money to get through this year, said Dr. Wendy Webb, superintendent. The five-year forecast estimates that amount at $2.25 million, borrowed as an advance against the levy revenue.
That $5.6 million figure should be low enough to avoid getting placed in "fiscal emergency" by the state.
If a deficit runs at least 8 percent of the general fund (projected at nearly $114 million this year), the Ohio auditor will put a school district into fiscal emergency, which involves the creation of an independent committee to oversee district spending and, essentially, take control away from the board of education.
Webb said the cuts imposed so far and those planned have avoided impacting academic programs.
Looking ahead
However, should the levy fail, more stringent cuts will be required, she said, adding that the administration hasn't stopped looking for other ways to reduce spending.
School board members are trying to determine what they should do next should the levy be turned down and how soon they might get it on the ballot again.
One of the first things to be done is to ask the state for a loan of between $9 million and $9.5 million to keep operating, said Carolyn Funk, district treasurer.
That money, which would be interest-free, would have to be repaid over a two-year period, she said.
Webb said the district would seek to meet with some consultants to map out plans, if the levy is rejected by voters.

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