The Columbus City School board heard the five-year fiscal forecast from Chief Financial Officer, Dr. Michael Kinnear, at their Oct. 16 meeting.
Kinnear noted Ohio state law requires such a forecast is done by school districts in Ohio by Oct. 31, as well as another forecast by May 31. Kinnear explained this forecast is meant as a guideline for the board, which gives a financial projection from the current fiscal year through the end of the fiscal year in 2012.
"I always make this caveat, once (the fiscal forecast) is adopted, it’s the board’s forecast, not the treasurer’s or the superintendents forecast," said Kinnear.
Kinnear proposed changing the accounting methods for General Property Tax, which includes real estate taxes paid by individuals and paid by businesses of the state so that the taxes are accounted for in the year the settlement is due.
Currently there is a variance between the years 2005, 2006 and 2007 because in the past the district has used the option to request taxes that got paid in advance.
Kinnear explained this way, monies received at the end of one fiscal year would still show those monies as available at end of the next fiscal year.
For instance, the General Property Taxes from fiscal year 2005 were $360,717,485; for 2006, $242,034,453; and for 2007, $299,970,754. Future yearly projections would then be approximately $318 million for fiscal year 2008, then $321 million for 2009 and so
"I increased the real estate by a 1 percent projection in each of the years up to 2010 when there’s a reappraisal; and then I increased it to 3 percent to account for the increase in value we’ll all see as a result of that reappraisal," said Kinnear.
Kinnear said due to House Bill 66, personal property taxes that relate to business tangible property, such as manufacturing machinery and equipment, public utility properties for local telephone companies and railroad property is being phased out, starting in 2007.
"The district will be held "harmless," that is, made whole for the loss of that personal property tax by the state of Ohio," said Kinnear.
Kinnear said the state makes up for the losses not only from the personal property tax phase-out, but also reimburses the district for monies lost as a result of the Homestead Exemption posted under Property Tax Allocation on his forecast.
Board member Carol Perkins asked how the higher ratio of foreclosures affects the district’s ability to collect taxes to fund the district.
"Actually that may help us; I know that sounds mean and contrary to what you might believe, but as people are unable to pay their taxes and if they do, for whatever reason, find their home in foreclosure and it goes to a sheriff’s sale or is purchased, the first thing they have to do is pay the taxes," said Kinnear.
Kinnear also said the delinquency rate for payment of taxes to the district this school year is about 40 percent.
Kinnear stated the average cost per teacher, which includes benefits such as medical and dental coverage, retirement, Worker’s Compensation, military benefits and overtime, is projected at $65,898 for 2009 and goes up subsequent years by 4.8 percent annually due to cost of living increases, making it $75,850 by 2012.
Perkins then asked if the managers in charge are held accountable for the overtime they are responsible for and what percentage of that average is for overtime.
"It’s already in our budgeting process; we actually do anticipate overtime based on past trends and that kind of thing, and budget managers are given what they have to live with," said CCS Superintendent Gene Harris.