Cuts in state funding, additional mandates and an economic recession have created a bleak financial forecast that might only be addressed through a local levy, according to Pickerington Local School District officials.

Cuts in state funding, additional mandates and an economic recession have created a bleak financial forecast that might only be addressed through a local levy, according to Pickerington Local School District officials.

PLSD treasurer Dan Griscom said Monday the financial outlook for the next two years likely will force the district to seek addition revenues through a levy as soon as this November.

"We've made over $3-million in budget reductions the past three years," Griscom said. "We've been proactive in tightening our belts and adjusting to a drop in revenues.

"With cuts in state aid we see in fiscal year 2012, we could be in for some severe cutbacks," he said. "It's not a hole we can fill with spending cuts alone."

Griscom compiled a five-year financial forecast through 2014. The Ohio Department of Education requires the projections twice each year.

He said the district expects to receive approximately $6.93-million in federal stimulus funds from the state over the next two years, but the money won't represent additional revenue for the district. Rather, he said, the funds are being used by the state to "meet basic funding levels."

"The district assumes the (federal stimulus funds) will disappear completely beginning in fiscal year 2012," he said.

As a result, Griscom predicted a $3.4-million drop in state funding for both 2012 and 2013 because of the loss of federal stimulus money.

According to the report presented to the school board on Monday, the district anticipates a gradual economic recovery will result in new construction in the district, which could result in a 3.1-percent increase in the district's share of general property taxes in fiscal year 2011, and 2-percent increases in fiscal years 2012 through 2014.

However, he noted that personal property tax revenues have declined sharply over the past several years due to a 25-year phase-out of the inventory portion of the tangible personal property tax. He said no replacement is expected for the tax.

The economic recession resulted in a 6.1-percent decline in income taxes delivered to the district in fiscal year 2010, Griscom said, and increases will be 3 percent or less over the next three fiscal years.

Additionally, PLSD interest earnings are "down considerably due to lower interest rates," Griscom said.

He predicted further decreases in future years due to low rates, as well as a decline in projected ending cash balances that provide principal for investments.

On May 10, the Pickerington Board of Education approved sending a request to the Ohio Department of Education for a waiver from a state mandate to provide all-day kindergarten beginning next school year. The request stated the addition of staff and classroom space would cost the about $1.3-million in the first year alone.

"These unfunded mandates are being handed out," board member Lisa Reade said. "Our goal when we look at our public education mission is to educate the students. The things (the state) is asking us to do are counterproductive to that mission."

In the meantime, the board this month approved base salary wage freezes for all of its union teachers, as well as administrators and staff, and has commissioned audits to evaluate key performance areas in the district, and to ensure ineligible individuals are not receiving health care insurance from the district. It also increased the monthly premiums for health insurance to be paid by administrators and supervisors in the district in 2010-11 to 20 percent.

"We want everyone to know we're doing our part to tighten our belts," Griscom said. "There's only so much we can do with flat or decreasing revenues when costs are going up.

"The levy is our last avenue," he said. "I'd say it's highly likely one would be on the November ballot. We'll be talking soon about this budget forecast and how much the ballot levy would be."

Local voters have passed several levies in recent years, but none have provided new revenue sources.

Last May, voters renewed a 0.5-mill building maintenance levy that allowed the district access to approximately $52.4-million in Ohio Schools Facilities Commission money to renovate the five oldest PLSD school buildings.

In March 2008, school district residents also renewed a 7.9-mill operating levy and a 5-mill levy was approved in November 2007 to replace an operating levy set to expire in 2008.

The last time voters approved new funding for the district was August 2003, when a five-year, 7.9-mill operating levy passed by 92 votes (5,089 to 4,969). That levy produced approximately $6-million annually.