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TWINSBURG -- "It is an interesting time for public schools."
Twinsburg City School District Superintendent Kathryn Powers began with these words March 20 to about 20 people at an open forum at the Twinsburg Public Library on the district's financial standing, the second of two planned gatherings before voters consider new money for the schools on the May 2 ballot.
The spring ballot features Issue 15, a 6.9-mill continuing property tax levy that school officials say is needed to make up for the loss of state revenue due to the phase-out of the Tangible Personal Property and Commercial Activities taxes. The levy, if passed, would generate $5.65 million for the district and cost the owner of a $100,000 home $241.50 per year.
Estimated at about $9.8 million by 2020, the loss in revenue from the taxes would (by 2020) represent about 23 percent of the district's current $42.68 million budget, said district treasurer Martin Aho. Right now, as it's being phased out, the tax revenue makes up about $4.6 million of the district's budget.
A $9.8 million loss by 2020 would give the district "a big black hole we will have to backfill," Powers said.
The governor's proposed budget indicates that the Twinsburg City School District is projected to receive $261,998 more in state aid in 2018 than in 2017, and $272,717 more aid in 2019 than in 2018, totaling $534,715 additionally over two years.
"Although this may seem like a bit of a windfall, recognize that over the next two years our school district will continue to be negatively impacted by the phase-out of the Tangible Personal Property/Commercial Activities taxes," Powers said. "Of even more concern is the fact that our school district will lose an additional $4.6 million when the ... phase-out is complete. This means that between fiscal year 2016 and fiscal year 2024, the Twinsburg City School District will experience the cumulative, compounded loss of Tangible Personal Property Tax/Commercial Activities Tax of [about] $27.4 million."
Further, Powers said, the Twinsburg City School District is a "capped" school district, which means that while the district received $5.3 million in state aid in 2017, it would have received $9.3 million if the funding had not been capped by more than $4 million.
According to the district's 5-year financial forecast, without new money, the district will be deficit-spending by 2020 by about $4 million, which is not allowed.
"A school district in Ohio cannot operate in the red," Aho said March 20. "Only the federal government can do that. We are looking to retain local control."
If a school district runs a deficit, Aho said, state officials can decide to manage that district's finances until such district is in the black again.
In 2012, the district made about $3.2 million in cuts, including $2.4 million in cuts through the reduction of 57 employees. The district also cut programming and classes at that time, and instituted pay-to-play fees. These cuts would remain, Powers said, even with passage of the May 2 levy.
In 2012, the district's leadership also promised not to seek new funds until this year.
"If there is no new money approved, it will be a very different school district," Powers said. "Without the levy, or without some relief from the state such as the relief from the funding caps from the state, there will be a need to consider further reductions."
Powers said she is hopeful that residents will continue to support the Twinsburg schools.
"Historically, our residents have supported our school district, therefore, I am very hopeful that the 6.9-mill operating levy will pass on May 2," Powers said. "If, however, the levy does not pass, the Board of Education will need to move forward with reductions in staffing, services and programming.
"At this point in time, the Board of Education has not determined the extent of those reductions and will not do so until after Election Day on May 2."
Renewal levies also needed
Aho also said the district also needs to pass three renewal levies -- levies bound by an expiration date -- between 2017 and 2020 to stay out of fiscal emergency by 2020.
The district's revenue, about $42.9 million in 2007 and again in 2016, has changed little in 10 years, Aho said.
"People keep saying we have to live within our means," Aho said. "Well, we have been, but revenue has been flat for the past 10 years."
With the passage of the new levy and the renewals, the district would have a positive balance of $12 million in 2020.
A general renewal levy, which generates $4.6 million for the district, could come before voters during the 2017-18 school year. Two emergency levy renewals, which generate $4 million and $5 million respectively for the district, could be presented in the 2018-19 and 2020-21 school years, according to school officials.
For more details, visit www.twinsburg.k12.oh.us or tune in to the district's monthly cable show, "Twinsburg Schools Today," on Cable 9 or through the website.