(Posted May 14, 2020)
By Kristy Zurbrick, Madison Editor
Leaders at Jonathan Alder Local Schools are starting to plan now for what is projected to be a nearly $1.3 million deficit in the district’s operating budget come June 30, 2021.
Prior to the onset of the coronavirus (COVID-19) pandemic, the district was on track to end fiscal year 2021 in the black. However, due to COVID-19 and its impact on employment, the district is now projecting a 10 percent decrease in income tax. Additionally, Gov. Mike DeWine recently announced state budget cuts that decreased state foundation funding for every school district in Ohio. For Jonathan Alder, those cuts meant a $447,000 reduction in state funding for this fiscal year.
“I can never recall getting a reduction like that so quickly. I guess it’s a sign of the times,” said Aaron Johnson, district treasurer. “The good news is that we can absorb that reduction.”
The district was on track to finish this fiscal year with an operating surplus of between $700,000 and $800,000. Now, that surplus will be about $328,000. Additionally, the district will end fiscal year 2020 with $8.8 million in cash reserves (equivalent to three to four months’ worth of operating expenses) on a $23 million budget.
“I worry about the first six months of the next fiscal year,” Johnson said, stating that he expects to see further reductions in all sources of revenues, including the potential for more reductions in state funding.
“This is the first time in six years that we’re projecting deficit spending,” said Superintendent Gary Chapman.
Because the district is heading into next year with a positive cash balance, school leaders can take a measured approach to tackling the pending deficit.
“We have some time to make good decisions,” Chapman said.
He added that his goal is to cut the projected deficit of nearly 1.3 million in half before the start of next school year.
On the personnel side, he said the district will consider a hiring freeze and internal transfers, rather than hiring new staff to replace employees who leave the district through resignation or retirement.
Chapman said the district also will look at deferring some curricular, operational, and maintenance projects at both the district and building levels.
An allocation of $173,000 in CARES Act funding–COVID-19 emergency relief funding from the federal government–will go toward reducing the deficit, he added.
The district’s school board plans to hold a special meeting sometime prior to its next regularly scheduled meeting on June 23 to talk about these cost savings measures.
“There might be more changes we don’t know are coming. We really have to start planning for this now,” said Steve Votaw, board member.
“What makes all of us nervous is six to 12 months from now, what are we going to be looking at?” Chapman said regarding economic volatility related to COVID-19.