Upper Arlington school district treasurer Andy Geistfeld provided school board members with preliminary numbers in response to Gov. John Kasich's proposed biennium budget at the board's March 28 workshop meeting.

Upper Arlington school district treasurer Andy Geistfeld provided school board members with preliminary numbers in response to Gov. John Kasich's proposed biennium budget at the board's March 28 workshop meeting.

Geistfeld stressed that all the projected information is strictly preliminary.

"These are best guesses right now," he said. "We're still waiting for additional information."

Geistfeld used the October 2010 five-year forecast to create his projections, and will provide the board with an updated five-year forecast in May. Several elements of the proposed budget will negatively impact the district's revenue stream, Geistfeld said.

The proposal will increase the phase-out of tangible personal property tax reimbursement, causing the district to lose $5.5-million over the five-year forecast.

"What's been proposed is that we get about $500,000 next year, and then nothing for the next five years," Geistfeld said. "We were not expecting to lose this reimbursement."

The district will also lose about $1.5-million in electric deregulation reimbursement funds. In 2002, legislation was passed to decrease assessed valuation on public utilities, and in response, the state instituted "hold harmless payments" for districts. Geistfeld said the district expected to receive hold harmless payments of about $380,000 a year through fiscal year 2016.

"With this proposed budget, the hold harmless payments phase out rapidly," Geistfeld said. The budget shows the district losing any electric deregulation reimbursement funds beginning in fiscal year 2012.

In October, Geitsfeld said UA forecast a total decrease in state revenue in fiscal year 2012 of 18.1 percent, or $676,000. This was a larger percentage than most districts forecast, and it reflected decreases in both state basic aid and state fiscal stabilization funds, he said.

"Under the simulations that were released last week, we were supposed to see an increase in fiscal year 2013, up to $2-million," Geistfeld said. "I don't feel comfortable putting that in there because I don't see how we can get an increase, especially when there's not even a formula established yet for fiscal year 2013."

Instead, the district has forecast the same amount of state basic aid for 2013-2015 as is proposed in 2012, which results in a total projected loss of approximately $3.9-million over the five-year forecast.

Geistfeld said that because UA was a guaranteed district in terms of state basic aid funding, there is a perception that the district is proportionately less affected by decreases in state funding.

"That's true when you look at just one line item, but when you start adding all these line items up, it starts impacting us very quickly," he said.

In October, the district expected a positive fund balance through fiscal year 2014, with the first negative fund balance expected to be 2015.

Under the proposed budget, the deficit balance has increased a year.

"We expect to be $6-million in the hole in fiscal year 2014 and $27-million in the hole in fiscal year 2015," Geistfeld said. He said some recent expenditure savings were not reflected in October's forecast, and will help offset the projected deficit.

Board member Robert Arkin said it's unlikely these expenditure savings will have a significant impact.

"Even with great planning and foresight to be fiscally conservative at every step, it just pales in comparison to the amount of loss we're looking at in the next couple of years," he said.

Geistfeld also said the district could be further impacted by pending legislation that would increase education choice and voucher programs. While it is unknown how the legislation will play out, he said it "could cost the district substantial money."

Geistfeld said he will continue to evaluate the proposed budget and provide the board with updates as new information becomes available.

"We expect it to be mid-to-late June before the budget is finalized," Geistfeld said. "We've got three months before this shakes out."

As the budget is finalized, the district will be better able to determine the amount of the anticipated November 2011 levy.

"For people who want to know the millage, we're a long way from that," said superintendent Dr. Jeffrey Weaver. "We're so dependent upon what we see through this process."