Updated Thu, Jun 6, 2013 4:18 pm
Due to wise spending, cost cutting and just plain luck, Alexander Local Schools expects to remain in the black for the next few years. But, a district can only control its expenditures for so long, says Treasurer Aaron Schirm. According to the district’s five-year forecast, the district may face deficit spending in the future.
“We’re still OK financially,” Schirm said, adding that the district has enough carryover funds to cover the deficit spending being projected at this time.
“We've watched our expenditures," he continued. "If people retired, we didn’t refill the position if we didn’t have to. We’ve had some good years in health insurance. In that case, we’ve been pretty lucky. But eventually, the negative is bound to creep up.”
After accounting for all revenues and expenditures, the district is expected to have a balance of $456,693 at the end of this fiscal year, which ends June 30. The next fiscal year’s balance is projected to drop to $259,052. By the end of fiscal year 2015, Schirm foresees the district overspending by $67,126. By the end of FY 2017, that number jumps to $584,825.
“You can only control your expenditures so much,” Schirm said.
The costs of fuel, retirements, insurance benefits and general operating expenses tend to increase every year, he added.
According to the Ohio Department of Education, it’s not uncommon to see deficits in years four and five of a forecast, which is a document designed to paint a picture of a district's finances based on a snapshot of today. Given the uncertainty of the state budget, local economic factors, state or federal mandates, etc., later years are hard to project.
That said, while expenditures increase, basic state aid has essentially remained flat. For fiscal year 2013, the district received $9,713,879, which amounts to around 65 percent of the district’s budget. That amount is also about the same the district has been receiving since 2009.
Flat-funding seems to be a trend in the most recent budget discussions. The Senate released its version of the state budget earlier this week. Estimates from the Senate’s proposal have Alexander schools receiving the same amount of state aid ($9,590,015) through fiscal year 2015.