Toledo Public Schools will still ask voters for more money in the fall, but for significantly less than previously proposed.
The Toledo Board of Education voted unanimously today to reduce its levy request by nearly a third, from 6.9 mills to 4.9 mills. Board members also changed the levy from a continuing, permanent levy to one that will expire in 10 years.
The levy request that was originally approved in May would have generated about $18.5 million a year for the district, and would cost the owner of a $100,000 home $211.28 per year. The new millage would generate $13.3 million annually and would cost the owner of a $100,000 home $150.06 annually.
Because the levy is a fixed sum levy, TPS Treasurer Matt Cleland said, the amount it will generate for TPS will stay constant, but the millage amount will change with property values.
The change comes after TPS ended the 2012 fiscal year under budget, with reoccurring savings that put the district on firmer financial ground than previously thought.
District officials still project large deficits two years from now without a levy. A 4.9-mill levy would effectively balance TPS’ budget through fiscal year 2016, while a larger levy would create surpluses.
“My recommendation is we go to the public and ask for the millage amount that we need,” Mr. Cleland said, “and not anything additional.”
When TPS won concessions from its three employee unions last year, it essentially created a two-year balanced budget, with a surplus in the first fiscal year, and a roughly equivalent deficit in the second year. The original projected surplus for fiscal year 2012 was $2.64 million, but final calculations this summer showed $8.58 million more than expected.
The larger surplus was attributed to three main sources, Mr. Cleland said. Fewer students left for charter schools or applied for private school vouchers than projected, leading to about $3.7 million more in state funds than TPS or the Ohio Department of Education projected. The state counts students in October, but its official calculations weren’t completed this year until May, leading to a late payment.
The other two sources came from reduced costs: the switch to K-8 buildings from elementary and middle schools saved about $1 million more in salary monies than expected, and a new health-care plan accepted in negotiations by the district’s unions also significantly reduced costs more than an actuary projected last year.
“We can only project so much,” board president Lisa Sobecki said, “and I know the Treasurer’s office has been projecting conservatively.”
Better revenue and lower costs should be recurring, but only if enrollment trends continue, state funding isn’t slashed, and the board holds the line on employee compensation. School districts have to submit five-year budget forecasts to the state, and Mr. Cleland has built into those projections a three percent increase in employee compensation after next year’s round of union negotiations. That’s an assumption, he admits, and a larger increase could create large deficits in future years.
When the board of education approved the original 6.9-mill levy request, officials said the new money would be used to implement the next stages of the district’s transformation plan and maintain the current programs developed in the past year. Thematic high schools; a science, technology, engineering, math, and medicine K-8 school, and development of a talented and gifted program for grades 3-6 are among programs TPS wants to start with funding from the levy.
Board member Bob Vasquez questioned during a finance committee meeting this morning whether a levy request that would leave the district with no breathing room was wise, or if it was better to keep a 6.9-mill request so that unforeseen circumstances wouldn’t force the district to come back to voters again, or return to the budget cuts of recent years.
“We are coming down to exactly what we feel we can manage with right now. No cushion. This provides no cushion,” Mr. Vasquez said. “I don‘t want to come back here and start cutting.”
Board members ultimately chose to reduce the levy request because they said they were sensitive to the continued poor economy, and because it would improve the likelihood the levy will pass.
Mr. Cleland said that this year’s surplus gave him more confidence in the district’s financial situation, which is why he recommended a 10-year levy, instead of the previous continuous levy request. Board member Larry Sykes said that 10 years is still a long time for a levy, and is asking for a significant amount of public trust. He implored board members to reach out to the community and listen to concerns about how TPS manages its finances and educates its children.
“I would hope that we reach out with the community and have community meetings and forums, to answer and explain things,” Mr. Sykes said.
Contact Nolan Rosenkrans at: email@example.com or 419-724-6086.