SUE HAGAN

Thursday, October 25, 2007

This Week News

More tax revenue than expected and fewer students leaving for charter or private schools have improved the financial bottom line for Columbus City Schools. That allows for the possibility of closing part of the food service department deficit and may affect how large the next operating levy will be.

The latest five-year financial forecast, presented by CCS Treasurer Michael Kinneer at last week’s school board meeting, shows operating fund revenues of $661.3-million this year, compared to the earlier estimate of $646.6-million.

“Revenue has improved because of the increase in real estate tax collections,” said Kinneer. That is partly because property taxes from some corporations are starting to come the school district’s way, rather than being diverted to pay for infrastructure through tax increment financing (TIF) arrangements.

“As some of those are starting to end, the amount diverted away is decreasing,” said Kinneer.

Carried over a couple of years, the increase in revenue means that the school district is projected to stay in the black through the end of the 2008-2009 school year, rather than dropping into the red after fiscal year 2008, which ends next year.

And that could have an impact on how much millage is decided upon for the next operating levy, expected to be on the ballot next year.

Board President Terry Boyd said the somewhat rosier financial picture doesn’t change the timing of the levy.

“But if we go on the ballot next year, and — heaven forbid — lose, then it might not be as serious a situation. We could go back on the ballot in ‘09,” he said.

Board member Jeff Cabot said going on the ballot next year is the best option, despite the improved financial outlook.

“We now show a modest cash balance at the end of ‘09, and a large deficit at the end of 2010,” he said. “I would still recommend we do another levy in November of ‘08.”

On the expense side, projected outgo is now expected to be about $5-million less than the amount budgeted, which was $651.6-million.

According to Kinneer, the district has lost fewer students than expected to charter schools and the voucher program, which means about $8.6-million less is expected to flow out to those schools.

“We had projected losing about 3,000 students a year,” he said. “This year, we are seeing a decline of only about 800 students.”

The amount saved is offset somewhat by having to hire more staff members for those students, resulting in a higher budget for salaries, wages and benefits.

Boyd said he “appreciates” the additional cushion, but that doesn’t mean the board will rush to spend money on items that might have been cut last spring.

“We have seen some expenses go down, but we could just as easily see some go up this winter,” he said.

Cabot agreed that holding onto the cushion is prudent.

“It’s early to tell,” he said. “Yes, if there are opportunities to buy books, we might look at that but I believe we still want to honor our 3-percent spending cap.”

It is likely that some of the extra might be spent as a permanent cash transfer to the district’s food service budget, which was about $6.9-million in the red at the end of June.

The new financial forecast shows a line item for almost $4.9-million in permanent transfers to funds that are running a deficit, including food services, which the board could choose to approve.