'Three-year' levy to last two years
'We are about to fall off a cliff,' says Marc Schare of district's financial future
Worthington school district voters approved a three-year incremental property tax levy last fall,
but don't expect those three years to elapse before another levy is on the ballot.
Along with a bleak five-year financial forecast, Worthington schools treasurer Jeff McCuen presented on Monday night a recommendation that a levy -- and a bond issue -- be placed on next year's ballot.
Last year's 6.9-mill levy will only keep the district out of red ink through 2013, according to the forecast.
McCuen said that a levy of approximately 6 mills should go on the November 2011 ballot. The continuing levy would only keep the district afloat for two years, then another levy would be needed.
If the levy is postponed until 2012, it would have to be approximately 10 mills, and would only last for one year, he said.
At the same time, the district's capital improvements money is about to run out, and the district must return to voters for another bond issue or be forced to take money for buses, building repairs, and computers out of the general fund.
Both at the Monday night meeting of the Worthington Board of Education and during a board retreat on May 7, board members repeatedly asked the media to convey to the public the seriousness of the district's financial situation. Besides large, frequent levies, residents can also expect to see major changes in programs.
Board president Julie Keegan made the analogy of the district being like a family forced to save money. Until now, the family has saved by cutting back on a cup of coffee a day. Now it is time to move to a smaller house, she said.
Before moving from a 2,500-square-foot house to a 1,100 square foot one, the community should be given a choice, said superintendent Melissa Conrath.
Changing elementary school configuration from kindergarten through grade six to kindergarten through grade three and grade four through six is one of the changes that will probably be considered. That plan was studied two years ago and has been awaiting a revival by the board.
Board member David Bressman also suggested creating a sixth-grade building at the Perry Middle School site and moving the Phoenix program to Worthington Kilbourne High School and putting all kindergarten classes in one building.
However the district decides to reduce costs, the decisions must be made soon, he said. He suggested appointing a task force immediately.
"We've got to start doing something before the end of the school year," he said.
Beginning this year, the district is spending more money than it is collecting. Expenditures in 2010 are expected to be $115.2-million. Revenue is estimated at $112.6-million.
Without a levy or additional spending cuts, the trend accelerates through 2114, when spending is expected to be $133.3-million and revenue $111.4-million, creating a $15.6-million deficit by the end of that year.
Having a major impact on revenues is the state's phase-out of its reimbursement to the district for the money lost with the cancellation of the tangible tax. Worthington was particularly hard hit among suburbs because it collected considerable tangible taxes from the Busch Brewery.
In 2005, the district's tangible tax revenue was $17.7-million. In 2014, it will be $2.6-million.
The district will also take a hit from the stagnant housing market. Until three years ago, property values increased at each three-year valuation. McCuen said he expects to see no increase next year, just as there was none three years ago.
The budget figures could improve if the state or the federal government come through with more support than the treasurer included in the five-year forecast. He included a 10-percent decrease in state support for the next two years.
The forecast assumed no increase in the base salary of teachers in 2012. The Worthington Education Association agreed to no increase during the levy campaign last year.
A one-percent increase for 2013 and 2 percent the following year were assumed in the forecast. Also included are step increases, which usually average approximately 3 percent per year.
Board member Marc Schare asserted that extending the teachers' contract for an extra year was not a wise choice. Now a new agreement cannot be reached until the spring of 2012, instead of 2011. When the teachers agreed to a 0-percent increase, they also agreed to lengthen the contract by a year.
A change in the negotiated agreement is one way to slow increasing expenditures, he said.
And something has to be done besides continually cutting programs, he said.
"Something has to change or we are about to fall off a cliff," Schare said.
Along with a bleak five-year financial forecast, Worthington schools treasurer Jeff McCuen presented on Monday night a recommendation that a levy -- and a bond issue -- be placed on next year's ballot.
Last year's 6.9-mill levy will only keep the district out of red ink through 2013, according to the forecast.
McCuen said that a levy of approximately 6 mills should go on the November 2011 ballot. The continuing levy would only keep the district afloat for two years, then another levy would be needed.
If the levy is postponed until 2012, it would have to be approximately 10 mills, and would only last for one year, he said.
At the same time, the district's capital improvements money is about to run out, and the district must return to voters for another bond issue or be forced to take money for buses, building repairs, and computers out of the general fund.
Both at the Monday night meeting of the Worthington Board of Education and during a board retreat on May 7, board members repeatedly asked the media to convey to the public the seriousness of the district's financial situation. Besides large, frequent levies, residents can also expect to see major changes in programs.
Board president Julie Keegan made the analogy of the district being like a family forced to save money. Until now, the family has saved by cutting back on a cup of coffee a day. Now it is time to move to a smaller house, she said.
Before moving from a 2,500-square-foot house to a 1,100 square foot one, the community should be given a choice, said superintendent Melissa Conrath.
Changing elementary school configuration from kindergarten through grade six to kindergarten through grade three and grade four through six is one of the changes that will probably be considered. That plan was studied two years ago and has been awaiting a revival by the board.
Board member David Bressman also suggested creating a sixth-grade building at the Perry Middle School site and moving the Phoenix program to Worthington Kilbourne High School and putting all kindergarten classes in one building.
However the district decides to reduce costs, the decisions must be made soon, he said. He suggested appointing a task force immediately.
"We've got to start doing something before the end of the school year," he said.
Beginning this year, the district is spending more money than it is collecting. Expenditures in 2010 are expected to be $115.2-million. Revenue is estimated at $112.6-million.
Without a levy or additional spending cuts, the trend accelerates through 2114, when spending is expected to be $133.3-million and revenue $111.4-million, creating a $15.6-million deficit by the end of that year.
Having a major impact on revenues is the state's phase-out of its reimbursement to the district for the money lost with the cancellation of the tangible tax. Worthington was particularly hard hit among suburbs because it collected considerable tangible taxes from the Busch Brewery.
In 2005, the district's tangible tax revenue was $17.7-million. In 2014, it will be $2.6-million.
The district will also take a hit from the stagnant housing market. Until three years ago, property values increased at each three-year valuation. McCuen said he expects to see no increase next year, just as there was none three years ago.
The budget figures could improve if the state or the federal government come through with more support than the treasurer included in the five-year forecast. He included a 10-percent decrease in state support for the next two years.
The forecast assumed no increase in the base salary of teachers in 2012. The Worthington Education Association agreed to no increase during the levy campaign last year.
A one-percent increase for 2013 and 2 percent the following year were assumed in the forecast. Also included are step increases, which usually average approximately 3 percent per year.
Board member Marc Schare asserted that extending the teachers' contract for an extra year was not a wise choice. Now a new agreement cannot be reached until the spring of 2012, instead of 2011. When the teachers agreed to a 0-percent increase, they also agreed to lengthen the contract by a year.
A change in the negotiated agreement is one way to slow increasing expenditures, he said.
And something has to be done besides continually cutting programs, he said.
"Something has to change or we are about to fall off a cliff," Schare said.
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