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Harrison school board discusses budget forecast

October 29, 2012
Weirton Daily Times

CADIZ - The Harrison Hills school board heard its five-year forecast last week, and District Treasurer Roxanne Harding noted 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 have made it difficult to formulate long-range forecasts or plan revenue allocations, according to administrators.

"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," Harding noted. "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 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, officials said.

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 means the loss of $1.3 million from the district.

The state had also given stabilization funds, which since have been diverted to balance the state budget. That $4.8 million also was 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.

The unencumbered balance is expected to begin lowering in fiscal year 2014. By fiscal years 2016 and 2017, the district is expected to be in a deficit.

Harding noted 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 the Ohio Department of Education has not as yet put out any new funding mechanism for school districts 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 the model had been expected to be in place on July 1 so districts 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.

The state's new deadline is June 30, and school districts are concerned they will have no time to prepare before the announcement, she noted.

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 this year, it will not be recorded until June, and the district would not see revenue until February 2014.

In terms of property values, there has been some additional construction in the county.

Harding noted the district's last operating levy occurred 1991.

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