Groveport Madison schools
Forecast takes aim at 'unwise' spending habits
In preparation for a levy request -- possibly as soon as spring -- Treasurer Anthony Swartz has prepared a five-year financial forecast aimed at getting the Groveport Madison school district out of some unwise spending patterns.
In a presentation to the school board Sept. 12, Swartz said a primary issue for the district has been spending tax advance funds, which is money given to the district based on anticipated tax revenue, before the actual revenue is realized.
In his report, Swartz said an 8-percent reduction in property values following the 2011 reappraisal process hurt the district significantly in 2012 and 2013. In addition, delinquent property taxes meant for the district have reached nearly $2.5 million -- a delinquency rate of more than 10 percent.
"Since I got here, we've been in the unwise habit of spending that advance money when we get it, but we're working to change that," Swartz said.
He said the problem with doing that is when the actual tax revenue falls below what is anticipated, which it has, the district budget ends up in the red.
According to Swartz, the five-year financial forecast he's developed will get the district out of this spending pattern and get the budget to a neutral state.
"The goal is to get out of the red, and this will all tie in to any levy request as well, like the need to provide for bringing back bus transportation and some of the other things we had to cut going into this year," he said.
"In this first year of cuts, you don't see the full effects due to some carryover, like retired or let-go teachers' salaries that we still have a couple months to pay on.
"But we get pretty close to break-even by fiscal year 2017. That's in regards to paying off the advances," he said.
When factoring in other revenues and expenses outside of the issue of the tax advances, the five-year forecast shows the general fund balance at the end of fiscal year 2014 is expected to be short by $4,278,715.
That drops to an anticipated deficit of $1,452,039 by fiscal year 2018.
There are other factors keeping the general fund budget from moving back into the black, Swartz said. He noted the district's medical insurance costs increased by 6 percent this year, and state cuts such as ending the homestead reimbursement and tangible property taxes also removed revenue streams.
While he said he couldn't guarantee costs for current expense items wouldn't rise, he is comfortable planning on the fact that revenue is likely to stay flat.
"Revenue in this district is getting to be a little easier to estimate," Swartz said. "We've had little growth and expect little growth in the future, so we've been able to establish this based on the actuals from last year and maintain that across all five years of the forecast."