Toledo Public Schools warns of 'ugly' outcome if levy fails

Toledo Public Schools' multimillion budget includes federal, state, and local revenues with personnel costs as the largest expense. Here are the figures for last year and the current year. Enlarge

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A $30 million cut from Toledo Public Schools' budget would mean school closings, layoffs, increased class sizes, and getting rid of programs.

While district officials haven't yet released what exactly will happen if voters reject a first-ever income tax for the district in May, Superintendent John Foley said it would be "ugly."

"We don't have a lot of things we can cut unless we cut into the core. We're looking at some pretty devastating cuts to the district," he said.

"There's an upside, but there is more downside to these cuts. The upside is you balance your budget, but the downside is you're going to lose programs that people probably come to expect and do you cut into programs that might cause students to then leave the district? So it's really a difficult process we're going through," the superintendent said.

Mr. Foley and members of the Toledo Board of Education said they plan to publicly reveal a menu of budget reductions in the next month that show what costs are associated with different programs.

Because the district's budget includes federal, state, and local dollars - some of which come with specific rules on how that money can be spent - officials need more time to crunch the numbers.

"I don't want to put cuts out there, and when the levy fails, those cuts don't happen," Mr. Foley said. "We have to be real about what we're proposing so people continue to know we're being honest and truthful and transparent about that process."

The district has until June 30 to finalize its budget.

But promises are not enough for some Toledoans.

Peter Lore, who has lived in the city for more than 20 years, said he needs to see some change in the schools and more information about the budget before he says OK to his taxes going up.

"I have trouble believing them," he said. "It's a good-old-boy network and they protect their own. I really think the voters should say, 'Until you get your act together and let us know where every penny is going, we're not going to vote for a levy.'•"

Mr. Lore, who said he took his children out of TPS, believes there are too many ongoing issues - such as the investigation into alleged thefts by former TPS chief Business Manager Dan Burns and the resignation of Leverette Middle School Principal Steven Riddle amid allegations that he exchanged inappropriate texts with a minor - to trust the district.

The tax request TPS is asking voters to approve would generate $18.1 million a year for the struggling district.

The 0.75 percent tax on earned income would exclude income from pensions, unemployment payments, and interest and dividends.

It would apply to people who live in the TPS district, regardless of where they work.

A 0.75 percent tax would cost $225 a year for a person with a $30,000 income.

Toledo Board of Education President Bob Vasquez said school leaders would rather not have to go to voters with a new tax, but they need to do so.

"I really feel like I have no choice because a $30 million deficit would, in my opinion, cut the district enough that I think it would start affecting the quality of our education," he said. "That's why I think it's absolutely necessary to go for this levy."

At least one factor that could have caused voters to reject the new tax has been eliminated.

Both the city and Toledo Public Schools were going to ask voters to approve additional income taxes, which would have been a hard sell in any economy, especially the current one.

But Toledo Mayor Mike Bell last week decided not to seek a tax increase, so only the TPS income tax will be on the May 4 ballot.

"I certainly believe the voters going to the polls and only having one income tax is a positive - if they have to vote for any at all," Mr. Vasquez said.

But even if the new tax passes, it will generate only enough money to address about half of the district's deficit.

The district plans to cut at least $17.5 million for the upcoming school year but will need to cut the whole $30 million if voters turn down the income tax.

Mr. Vasquez said that the district has been anticipating a deficit for the 2010-11 school year for some time but expected it to be much less.

In May, before the current state budget was finalized, the deficit for 2010-11 was forecast to be $17.8 million.

Declines in state funding, property tax revenues, and enrollment have negatively affected the district's bottom line in recent years.

A combination of the decline in property values, high mortgage foreclosures, and little new construction have caused a steep decline in property tax revenue, TPS Treasurer Dan Romano said.

In 2008, TPS received $97.6 million in local tax revenue, which fell to $91.2 million in 2009 and is estimated to be $84 million this year.

State funding was $234 million in 2009, falling to $220 million in 2010.

In response to plummeting revenues and declining enrollment, the district has cut expenditures the past few years, with a $10 million reduction this year that caused the closing of Nathan Hale and Fulton elementary schools and the loss of more than 100 positions - including 88 teachers - through layoffs and attrition.

TPS plans to spend $290 million in the current school year.

Cutting an additional $30 million this year if the income tax measure is defeated on May 4 would result in an additional 10 percent reduction.

The district has 127 fewer employes than it did last year.

TPS cut 30 positions in the 2008-2009 school year and 45 additional jobs in the 2007-08 year through attrition.

Most of the reductions have been in response to enrollment declines.

The current school year count is not finalized because of glitches in the state system, Mr. Foley said, but about 25,000 students attend TPS this school year, continuing the trend of declining enrollment. Enrollment was 26,600 last year and about 28,000 the year before.

"We've cut budgets annually, so we've been leaner and leaner in addressing our deficits through that process, but these changes in funding cycles and the economy all are certainly going to be challenging," Mr. Foley said.

The largest expense for TPS is personnel, Mr. Foley said.

While the district is still not as competitive with salaries as it would like to be, the employees in 2008 received their first raises since 2002.

The average TPS teacher salary is $52,735, according to the Ohio Department of Education, ranking Toledo teachers sixth out of the state's eight urban districts. Cleveland teachers make the most with an average salary of $65,575.

The 2008 contracts also settled a long overdue retroactive pay issue of raises promised to teachers. That cost the district $18 million in a combination of lump-sum payments and raises added into the permanent salary schedule.

Negotiations are now beginning on a new contracts with the district's union employees. The Toledo Federation of Teachers' contract expires at the end of March, and contracts with the Toledo Association of Administrative Personnel and the American Federation of State, County, and Municipal Employees are up at the end of June.

Mr. Foley would not discuss what requests for concessions would be made. But he did point out that TPS employees contribute to their pensions and share the costs of health care.

"We have talked to our bargaining units about helping us suggest budget reductions to address the pending deficit," he said.

Francine Lawrence, president of the teachers' union, said the union endorses the income tax request because of the provision not to tax pensions and unemployment benefits.

As the district discusses the $30 million deficit and talks about the cuts needed to eliminate the shortfall, teachers and other employees are concerned for their future, Ms. Lawrence said.

"There is concern about teacher layoffs, class size increasing, and the support services for teachers and students continuing at the same level," she said.

And unfortunately, Ms. Lawrence said, information about possible cuts has been kept quiet.

"Cuts need to start at the top," she said. "Cuts need to be made as far away as possible from the classrooms."

But addressing the deficit - whether $17.5 million or $30 million - likely will result in more staff reductions, as well as building reductions, as in the past.

Closing an elementary school saves about $500,000. The savings are $1 million for a middle school and $2 million for a high school.

Last year's closings of Nathan Hale and Fulton elementary schools netted a $1 million savings. School officials haven't mentioned any specific schools that could be on the chopping block for the upcoming reductions.

"We're trying to look at it from a perspective of the classroom and what the students need academically and try to keep as much of that in place as possible," Mr. Vasquez said.

The approach will be prioritizing what schools need to provide for students and what services are above and beyond the necessary academics.

The board is developing a timeline of releasing possible cuts and getting feedback before the May 4 election.

Fixing this budget deficit is the last project for Mr. Foley, who is leaving the district when his contract ends July 31.

Mr. Foley said he has put procedures in place that will benefit the district in the long run.

"It is about the district, and it isn't about the leader," he said.

"This levy has to be promoted as what's right for the district."

Contact Meghan

Gilbert-Cunningham at:

mcunningham@theblade.com.

37.90104 12.49646

Superintendent John Foley and school board members plan to reveal proposed budget cuts in the next month. ‘We have to be real about what we're proposing so people continue to know we're being honest and truthful and transparent,' Mr. Foley said. THE BLADE/AMY E. VOIGT Enlarge | Photo Reprints

A $30 million cut from Toledo Public Schools' budget would mean school closings, layoffs, increased class sizes, and getting rid of programs. While district officials haven't yet released what exactly will happen if voters reject a first-ever income tax for the district in May, Superintendent John Foley said it would be "ugly." "We don't have a lot of things we can cut unless we cut into the core. We're looking at some pretty devastating cuts to the district," he said.