By JAN LARSON McLAUGHLIN
BG Independent News
Bowling Green Board of Education was shown a grim picture of the district’s revenue on Thursday. Cuts will have to be made – it’s just a matter of what and how much.
First, the COVID-19 pandemic will lead to big losses in tax revenue – possibly as much as $800,000.
Second, the cuts to BG Schools from the state have begun with $700,000 being slashed, and may not stop until $2.2 million is gone.
And third, the possible loss of property that is being petitioned to move to other districts could mean the loss of $2 million a year.
The district’s financial consultant, David Conley, described all the hits coming at once for the school district, and the board discussed potential cuts that may have to be made.
Looming cuts
Since 80% of the district’s budget is in personnel, those costs will have to be examined.
“We need to really look closely at personnel,” board member Bill Clifford said.
Board member Tracy Hovest said any reduction in force should be a last resort.
“Our kids need our teachers more than anything,” she said. “We have got to look at all other avenues first.”
Board member Norm Geer also suggested that staff cuts not be discussed until absolutely necessary.
“I don’t know that we need to talk about ‘RIFing’ now,” he said. “I don’t think that’s a way to reward them for all that they’ve done.”
Geer voiced hope that the state would come to aid of school districts.
“We’re all in this together. The state’s going to have to do something,” he said.
But Clifford wasn’t optimistic of the state coming to the rescue.
“I’ll be surprised if they do,” he said.
“I get it, but we’re not printing money,” Clifford said.
Superintendent Francis Scruci said if schools are forced to cut non-essential services, science, math, social studies and English would be preserved.
“Everything else could be considered non-essential,” he said.
Board member Jill Carr suggested the district identify priorities and plug in projected numbers.
“This is a huge, daunting task,” she said.
Scruci said members of the administration are meeting twice a week – with looming cuts as part of their discussions.
“Our administrators are very well aware that we’re looking at tough times and going to have to tighten our belts,” he said.
The administrators have agreed to take a freeze on their salaries for the next year, Scruci said.
Clifford emphasized the need for communication.
“People are fearful of the unknown,” he said. “Now would be a time to really engage the staff.”
Carr agreed.
“I think it’s so important to have your whole leadership team involved,” she said.
Scruci said the administration has been in communication with union leadership.
“I feel very confident we can work together,” he said.
Petitions
Bowling Green school district could lose thousands of parcels of land from its boundaries if the petitions to transfer to neighboring school districts are passed by voters in August.
“This would leave a gaping hole in the financial structure of Bowling Green schools,” Conley said. “You’re losing some of the most valuable real estate.”
The district would lose up to $2 million a year in tax revenue, plus lose about 220 students.
The remaining residents of the Bowling Green district would then have to replenish the lost revenues – possibly requiring a 15% increase in taxes just to maintain the status quo, Conley said.
Conley presented a chart with numbers from the Wood County Auditor’s Office that compared taxes in the districts where the petitioners are asking to join. Based on the median home value and income, those annual taxes are:
- Patrick Henry: $2,942
- McComb: $2,475
- Elmwood: $2,268
- Otsego: $2,236
- Eastwood: $2,137
- Bowling Green: $1,893
Conley pointed out that the properties leaving Bowling Green’s district will still be required to pay bonds that they remain committed to for BGCS, as well as bonds for the school district that they would be joining. He also noted that all the other districts have traditional income taxes – but all higher than Bowling Green’s.
Superintendent Francis Scruci said he has been contacted by parents whose property has been swept up in the petition process.
“We will accept open enrollment,” he said. “The kids have nothing to do with this, but they’re going to be the ones affected.”
COVID-19 impact
The coronavirus pandemic has created a man-made economic slowdown, Conley explained. Currently 9,359 Wood County residents are receiving unemployment benefits.
“The actual number of unemployed could be substantially higher,” he said.
The depth and duration of the slowdown is unknown. A second wave could further devastate the economy, Conley said.
The impact will be seen in the loss of income taxes from people who lost their jobs, and a potential loss in property taxes from delinquencies due to people being unable to pay their taxes.
“Income tax is very risky as a revenue source,” he said.
Conley predicted a loss of $635,000 in income tax between now and 2022.
“We will keep our fingers crossed that the number will be better than we think it will be,” Conley said.
The loss of property tax revenue could reach as high as $210,000, he said.
“That’s a relatively small number compared to the others, but it is a loss nonetheless,” he said.
Meanwhile, the Rover pipeline continues to appeal for lower taxes, investment income is down, and interest income took a dive, Treasurer Cathy Schuller pointed out.
“We’re in the midst of a financial crisis,” she said.
“This is exactly why you want to maintain a decent fund balance,” Conley said. “This will allow us to survive this period of time without drastic actions.”
“If not for the fact that we have balances, the impact could have been disastrous for you guys,” he said.
State cuts
Bowling Green City Schools has already been handed a $700,000 loss in state funding – and that’s likely just the beginning, Conley said.
With businesses closed and people staying home, sales tax revenue took a nosedive.
“As the economy shut down, revenues to the state dropped,” he said.
And since education is the second biggest budget item, behind Medicaid, it’s an easy target for cuts, Conley said.
“Most likely schools will be dead center again for the next stage of cuts,” he said.
Overall, the state’s first cut to K-12 education was $300 million.
“Education is a big target,” Scruci said. “That $300 million could look like child’s play when it comes around to July.”
Conley predicted BG could see a loss of $2.2 million in state funding through 2021.
“That number could potentially be higher,” he said.
The district is in line to get up to $400,000 in federal CARES Act money that can be used to offset the costs from the coronavirus pandemic.
What’s in store for the fall?
Gov. Mike DeWine needs to make a decision about whether K-12 education will meet in school buildings or online in the fall, Scruci said.
If schools are expected to maintain social distancing, that would mean a classroom that normally has 30 desks could just have nine desks. And a typical bus could transport only 12 students at a time.
“How does anybody expect us to educate nine kids at a time,” Scruci said.
Until some direction comes from the state, “we’re flapping in the wind,” he said.
Scruci said DeWine seems to be listening more to affluent school districts in the Columbus area.
“I don’t believe that Northwest Ohio is being represented in Columbus,” he said. “We’re not getting a seat at the table.”
Ultimately, Scruci said his main concern is safety.
“For me, it’s always going to come back to the safety of our students and staff,” he said.
