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Kasich budget cuts funds to Toledo area school districts

Kasich budget cuts funds to Toledo area school districts

Some local school districts could face state funding reductions of 20 percent or more next year under Gov. John Kasich's proposed budget.

It appears every district ends up a loser under the budget plan, with federal dollars gone and not replaced and several tax reimbursements phased out.

The result is millions of dollars less for area schools.

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But under the proposed budget, some districts lose more so than others.

Toledo Public Schools' budget is hit relatively less than those of most other area districts.

The district still stands to lose about $15 million, or 7 percent of its state funding, in fiscal year 2012, but the school system planned to lose twice that much. But that doesn't mean school officials are elated.

"We just got less bad news than expected," TPS Treasurer Dan Romano said. "Having a reduction of $15 million is not good news."

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Even though the district would face less of a drop in state funding than expected, the school system still has a significant budget deficit. Further state cuts are projected for fiscal year 2013, but Mr. Romano said he doesn't believe those are set in stone.

During the past week, Mr. Kasich's administration released piecemeal breakdowns of his proposed budget's effects on individual school districts. While many districts would get slight increases in state foundation payments -- the bulk of their state funding -- most of those gains would be washed out because of the elimination of federal stimulus funds, officials said.

Tuesday, the administration released breakdowns of Mr. Kasich's proposal to quicken the phase-out of tangible personal-property tax reimbursements. Businesses previously paid the tax on machinery, equipment, inventory, and furnishings. The tax was cut in 2005, but a new state tax on business gross receipts was used largely to reimburse schools, since most of the tax's revenue went to districts.

Mr. Kasich's budget would have a similar impact on state reimbursements to districts under a tax on utilities.

Schools across the state face stiff cuts under the proposal. But part of Mr. Kasich's school-funding plan appears to include a "Robin Hood" element, TPS officials said. Richer districts see larger state funding cuts in his plan, compared to districts with high poverty rates, such as Toledo's.

For example, Maumee City Schools would lose $1.35 million in state funding in fiscal year 2012, or more than 15 percent. That kind of a cut, Superintendent Greg Smith said repeatedly, is overwhelming. The district had only planned to lose about 5 percent.

"That is huge, and that is going to be devastating," Mr. Smith said.

Maumee already had faced a budget deficit of $4.5 million in 2014. Before the proposed cuts, the district projected a $268,000 carryover balance in June, 2012, and hoped that a 5.9-mill operating levy on the ballot in May would be passed and boost the number to $1.3 million. Now, any wiggle room created by the passage of the levy would be effectively erased by the proposed state cuts.

Mr. Smith repeatedly called the cuts devastating. The Maumee Board of Education voted Monday to close Union Elementary School to save about $350,000 a year. Even more cuts may be on the way.

"We are going to have to take a look at our entire budget," Mr. Smith said.

Toledo Superintendent Jerome Pecko said he's watching to see if legislators who represent districts with steeper cuts may try to alter the formulas for school funding.

The cuts to Perrysburg Schools are even deeper. The district would lose $1.8 million, more than 17 percent of what it received from the state in fiscal year 2011. Perrysburg's biggest loss comes from the reduction in the tangible personal property tax.

Perrysburg Superintendent Tom Hosler said he expected the reductions, and said he understands that everyone needs to help fix the state's deficit. But he said there's been a lack of transparency by the governor about the cuts that schools will face under the proposed budget.

Mr. Hosler said he heard Mr. Kasich last week in Wood County, and took issue with a comment during the speech that schools would get an increase in funding, a reference to the increase in state foundation payments.

"I wish the governor had come out and said, 'Schools, you need to feel the pain, too,' instead of saying, 'Schools, you are going to get an increase,' because obviously that is not accurate," Mr. Hosler said.

Telling taxpayers that districts are getting funding increases when they actually face steep cuts makes it harder to explain their budget struggles, Mr. Hosler said.

The Sylvania City School District would lose more than 20 percent of its state funding, with an anticipated $3.8 million in fiscal year 2012 under the governor's proposal.

Washington Local Schools' proposed losses are more in line with Toledo's. The district stands to lose about $2.4 million, or 8 percent of its state funding, under Mr. Kasich's budget. But while district officials expected a loss of state foundation payments, they did not expect the acceleration of tax reimbursement reductions, district Treasurer Jeff Fouk said in a statement.

Mr. Fouk also disputed the governor's position that reductions in state aid would be offset by savings provided under Senate Bill 5, which limits collective-bargaining rights for public employees. The bill, which is expected to soon pass the Ohio House, likely will face a repeal effort, and its possible benefits to school districts might not be in effect for years. Meanwhile, Mr. Fouk said, the cuts are immediate. "School funding has been ruled unconstitutional three times by the state Supreme Court," he said, "and the lack of state support for schools continues."

Contact Nolan Rosenkrans at: nrosenkrans@theblade.com, or 419-724-6086.

First Published March 30, 2011, 6:26 a.m.

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