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HAMILTON — In February 1993, the Hamilton City School District passed an operating levy by a 13-vote margin.
Although school board members say there wasn’t any organized opposition, there is enough anti-tax sentiment these days that levies are getting harder to pass.
So rather than embark on a path of putting an issue on the ballot every three or four years, as is common with many districts, Hamilton decided to travel the road of “right-sizing,” as Treasurer Robert Hancock likes to put it.
“Every year, we not only look at the next year’s budget, but at the budgets for the next three years,” said board member Glenn Stitsinger. “And we’ve been reducing expenses the best we can for the last 16 years,” trimming nearly $29 million to a fiscal year 2011 budget forecast of $75 million.
One thing that’s helped, Stitsinger said, is that most of the district’s budget — around two-thirds — comes from the state, so Hamilton doesn’t rely as much on local money as do some wealthier districts.
But that is about to change.
Ohio Gov. John Kasich is scheduled to release his biennial budget on Tuesday, and with an $8 billion shortfall statewide, schools everywhere are bracing for a big hit. Hamilton officials are expecting a 10 percent reduction in state funding, fearing that it could be as high as 20 percent, and already have outlined cuts of $5 million that they expect to go forward with no matter what the state budget brings.
Still, like the cuts, a fall levy is a certainty.
“We are going to put a levy on the ballot,” Stitsinger said, but the amount of the levy will depend on two things: the budget cuts from the state and how much the district saves from plans already in place, such as an early retirement buyout .
Still, the board doesn’t expect a levy to be an easy sell, partly because it’s been so long since it has asked for operating money.
“We’ll try to educate them as much as we can as we go along so people will understand the situation we’re in,” said board President Larry Bowling.
Hancock said, “The state has a budget crisis, and that becomes our budget crisis, a multimillion dollar reduction in our revenue stream that we have to deal with.”
Hamilton treasurer says district has made cuts
HAMILTON — Ohio Gov. John Kasich is expected to release his biennial budget on Tuesday, and no one in the world of education is looking forward to it.
To call what the schools are facing a crisis is not overstating the case, according to Hamilton City School District Treasurer Robert Hancock.
“I think we are going to get slammed,” he said.
Hancock said he’s been preparing for significant cuts in state funding to Hamilton schools since May last year when he submitted to the board a series of graphs showing what various levels of reductions from the state would do to the district’s cash reserves and bottom line over the next five years.
The crisis has been looming for a while, he said, and the only reason it hasn’t gotten worse sooner is because of federal stimulus money that helped the district get through the last two years.
“We did not add any staff, but we simply filled a budget hole with that money,” he said. But that source is gone and not expected to return.
District plans for cutback scenarios
Last May, Hancock presented the board with three scenarios: If state funding remained flat, if the district would receive a 10 percent reduction in state funding and if the district would receive a 15 percent reduction.
Even if state funding remained flat, however, with the loss of other money, such as the expiration of the federal Education Jobs Fund, the district would be running in the red by fiscal year 2014, the 2013-14 school year.
A 10 percent decrease in state funding would account for a $5 million revenue loss, putting the district nearly $10 million in the red by fiscal year 2013 and nearly $40 million in the red by fiscal year 2015.
A 15 percent decrease would require a spending reduction of at least $7.5 million annually, but now, Hancock thinks that maybe 15 percent was too conservative and they might be losing as much as $10 million.
District finds ways to keep costs down
Whatever the case, Hancock started looking for ways to both cut costs and generate money, which is something he’d been doing anyway since 1994 after the district passed its last operating levy by 13 votes.
“Since then we’ve done incremental cuts from $600,000 a year to $1.5 million a year,” Hancock said. “When you compound all that, it comes up to about $29 million.”
Still, Hamilton’s cost-per-pupil remains flat compared to the state average. In 2006, the state average was $9,355 per pupil, while Hamilton spent $9,190. In 2010, the state average had risen to $10,513 per pupil, while Hamilton spent $9,532.
At the same time, however, the district has not cut any salaries and hasn’t missed an annual salary increase, though the last round was only 1.5 percent and included a restructuring of the teachers’ medical plan to increase their own contributions.
And the district found “revenue enhancements,” such as making the decision to allow open enrollment, which while unpopular with much of the community turned a $600,000 deficit from losing students to other districts to a $600,000 positive “overnight,” Hancock said.
“We did it just by filling empty seats,” he said. “We didn’t do it by adding teachers but by looking at the capacity of each building.”
By restructuring the alternative school from a teacher-heavy system to a computer-based system, the district saved another $600,000.
Revenue enhancement ideas running out
But with the crisis looming, the cuts have gotten deeper and Hancock admits, “We’re running out of ideas.
“Honestly, it’d be easier to tell you what we haven’t looked at cutting,” he said. “We spent from August to February looking at all kinds of things, but we did our best to stay out of the classroom.
“But when these new numbers come in, that may not hold true.”
In February, Hancock made another presentation to the board, outlining $4.2 million in cuts from its 2011-12 school year budget, forecast at $77 million in expenditures including:
• $992,600 in central office and administrative reductions, including the elimination of 4.5 administrative positions, reducing work days for all administrators and eliminating in-county administrative mileage reimbursement.
• $1,685,800 in operational savings, including 10 percent reductions in building expenses and 15 percent reductions in departmental budgets, reduction of janitorial and clerical staffing, closing buildings during the month of July except for summer school sites, and renegotiating copier leases.
• $316,000 in program reductions, including Gifted Services, electives and reduced testing.
• $1,178,350 in staff reductions, including reductions in noncore academic teaching staff, hiring costs, staff training and supplemental costs.
• Generate $23,250 in fee increases, including paying to participate and charging for AP tests.
Hancock said additional savings can be made during upcoming contract negotiations and with an early retirement severance package offering that is in the works.
“I’m not so sure $4.2 million is going to do it,” Hancock said. “But it’s a good start.
“We want, at all costs, to operate within our revenue stream,” he added. “But when the state comes in and makes a multimillion cut, that’s not going to happen.”
The bond issues that the district put before the voters in 1999 and 2006 raised $117 million for the school’s construction drive and was matched by $120 million from the state. That is different from operating money, Hancock stressed, and has actually helped the bottom line by consolidating costs.
“We’ve saved a little on staffing because we have larger (elementary school) buildings and we’ve been able to cut some teaching jobs,” he said. “That starts to add up, but overall the numbers have stayed pretty flat.”
Hamilton not alone
Hamilton is not the only district holding its collective breath to see what Tuesday’s budget announcement will bring.
Ross Local School District Superintendent Greg Young said that they are in the process now of informing staff that jobs are on the line as they look at a reduction of $1 million to a $22 million budget.
“We’ve been reducing over the last two years in anticipation of the loss of stimulus money,” he said. “Now we’re making plans and brainstorming what we can do, but we don’t have a lot to cut without getting into staffing.”
In recent years, Ross had cut back on its busing services, only has one school nurse for four buildings, and maintains the lowest cost-per-pupil average in Butler County at $8,460.
“We’re looking at all aspects of our operation,” he said, “but we’re cutting into the meat of our operation pretty quickly.”
Hamilton Board of Education President Larry Bowling said, “It’s an ugly situation, and next week it’s only going to get uglier.”
Contact this reporter at (513) 820-2188 or rjones@coxohio.com.
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