LORAIN — Lorain Schools could see a $24.5 million deficit by 2022, according to Treasurer Josh Hill’s latest five-year forecast that was released this week.
Hill said the deficit is under the assumption the district doesn’t renew any of its four levies and that it doesn’t receive additional money from the state’s biennial budget.
“I have to assume the levies aren’t going to pass, so I take them out of the equation,” he said. “That is assuming the $3.1 million emergency levy doesn’t pass that we’re going to put on this year. It’s also assuming that in 2022 the three current expense levies don’t pass. It assumes no increase in the biennial budget beyond the current one, so 2020 and 2021 would be the next one.”
Hill said the statewide elections in 2018 could affect how much the district receives in the next biennium budget, which typically is a $2.2 million increase each year, causing him to never assume increases there because there’s too much at play.
According to the forecast, barring no levy renewals or new money levies as well as no additional money from the state, the district is expected to have a $14.5 million surplus in 2018, a $13.3 million surplus in 2019, a $6.2 million surplus in 2020, a $5 million deficit in 2021 and a $24.5 million deficit in 2022.
The forecast does say if voters do approve the renewal levies, the surpluses for 2018 and 2019 will remain the same, the surplus for 2020 will be $7.9 million, the deficit in 2020 will be $1.6 million and the deficit in 2022 will be $16.1 million.
Hill, who also serves at the district’s chief innovation and strategy officer, said the financial forecast released in October had a projected shortfall of about $180,000 in 2021 but that increased due to general property tax revenue coming in about $400,000 lower than what he projected and about $370,000 lower than last fiscal year, totaling $1.6 million over the course of four years.
Hill also pointed out an increase next year in the district’s capital outlay expenditure because the district changed insurers and the cost came back higher, from $1.3 million to $1.7 million.
Hill said the district will see about a $447,000 decrease in spending for supplies and materials next year because of a new budgeting procedure.
“It went down from previous estimates based on us having a more proactive approach to the budgeting,” he said. “We did a much more in-depth look at budgeting time, and we’re pushing more back into the buildings — responsibility-wise — for managing the budgets. We would estimate before but now we’re saying you’re getting this amount for this specifically. We’re able to fine tune those numbers a little bit.”
School board President Tony Dimacchia said the Board of Education hasn’t decided if it will put the $3.1 million levy before the voters this year, one of the board’s only remaining powers after state House Bill 70 instituted a takeover of the district last summer.
“That hasn’t been decided,” he said, noting the board has until August to make a choice. “It hasn’t even really been discussed. We hope to discuss that soon, but the conversation will probably happen in June sometime.”
Dimacchia said with the board placing a unanimous no-confidence vote against the district’s CEO, David Hardy, and the direction of the district earlier this year, it puts the board in a tough spot when it comes to asking the voters to give the district money.
“If we don’t believe in how the district is being run then how can we ask residents to pass a renewal or even a new money levy?” he said. “Because, eventually, I think we’re going to need new money, too. We’re not happy with things that are occurring.”
Dimacchia said his views are his personal ones rather than speaking on behalf of the board but it’s hard to ask residents to support a direction for the district that the board said they didn’t believe in.
If the levy doesn’t end up on the November ballot, the district has two more chances to put it before voters — May and November of 2019 — before the money runs out at the start of 2020.
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