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Area school treasurers face daunting task

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By JENNY DERRINGER

derringer@crescent-news.com

Balancing a personal budget these days can be rather tricky. Many times, one can only "guess-timate" expenditures and revenues. This is due to soaring costs of everything from gas, food and insurance on the expenditures side and the uncertainty of a paycheck on the revenue side.

Now try to balance the budget of one of the largest employers in your area -- the task put to chief financial officers (CFO) and treasurers at area school districts.

Typical revenues to schools come in the form of real estate, personal property and school district income taxes, in addition to restricted and unrestricted grants and property tax allocations.

But in this unstable economy, those revenues don't necessarily continue to rise. Meanwhile, increasing school expenses include personnel salaries and services, utilities and school supplies. With figures on both sides of the ledger continuing to change each year, treasurers are still expected to stay out of the "red" and produce a five-year budget forecast for the Ohio Department of Education.

"The Ohio Department of Taxation alerted us not to be surprised and plan on an approximate 30 percent drop in school district income tax revenues," said Eric Beavers, CFO/treasurer of Defiance City Schools.

That may be the average statewide, though Beavers observed that the January school income tax payment reflected a 15 percent reduction from the same payment period last year.

But each district will vary statewide depending on the makeup of its workers -- blue collar, white collar, automotive industry, etc. It just all depends on who took the biggest financial hit during the current recession.

Beavers noted that the first two quarters of 2008 had exceeded income tax projections, while the third quarter dropped by 15 percent, so he said that technically the district is still 4 percent ahead of projections. To date, the district has received 79 percent of its income tax payments and will have one more coming from 2008 collections.

As far as funding from property taxes is concerned, Defiance County Auditor Marlene Goodwin has seen an increase in county property valuations. Since the county is partially through it triennial period, the next revaluation won't come until 2011. (Despite that, those with property on the market are seeing an approximate 10-13 percent drop in value from what their homes had been appraised at in as little as six months ago.)

"Property values in our school district actually increased for 2008, payable in 2009," explained Northeastern Local Schools treasurer Sue Garmyn. "Agricultural and residential real estate, combined, went up by almost 11.5 percent. Commercial and industrial real estate values and public utility values went down slightly.

"We will be receiving our first-half real estate tax settlements next week," she said, "and I am interested to see how it compares to last year's settlement."

Williams County has also seen a slight increase in personal property taxes.

"Stryker had an increase of .7 percent from tax year 2007 to 2008 for residential valuations," explained Richelle Oberlin, treasurer of Stryker Local Schools. "Also, the average home value went from $92,526 in tax year 2007 to $92,791 in tax year 2008.

"Williams County will go through a triennial update in 2009," added Oberlin. "The state will determine the housing values by comparing the market value to the actual purchase price of 'valid sales.' This does not include foreclosures or sheriff's sales."

In preparing her budget, Oberlin projected that the valuations would remain the same with no increase or decrease.

"I think it is very difficult to budget and prepare the five-year forecast when there are so many variables and unknowns," she added. "I try to be conservative in my estimates and error on the side of caution."

Being conservative in budgeting can be helpful for all school treasurers.

"It is very difficult to prepare the five-year forecast, especially when we do not know what the next state budget will look like," added Garmyn. "The governor has proposed significant changes to school funding in the state of Ohio, but until his budget works its way through the legislative process we will not know what we can expect to receive from the state for the next two years. Revenue projections for the fourth and fifth years of the forecast are very difficult."

Also being thrifty with school funds is Beavers.

"I've been very frugal and conservative in budgeting since last fall," said Beavers, as he saw the economy start to take a serious dip. "We could be in far worse shape now if I hadn't anticipated that."