School Board given bleak budget picture

Talk about getting thrown right into the fire.

Five new Warren County School District board members took their seats in December.

They heard during Monday’s committee meeting that – at current rates – the school district will go bankrupt at some point during the 2026-2027 school year.

“This is a tough situation,” Director of Business Jim Grosch told the board on Monday. “There are only a couple levers the board can really pull.”

One? Increasing taxes.

The other? Reducing expenses by cutting programs.

“There is going to need to be some significant movement here,” Grosch said.

Before the board can worry about that point, they’ve got to get their hands wrapped about the 2024-2025 budget, which must be passed by the end of June and currently carries a structural deficit of nearly $6 million on a $94.5 million spending proposal.

Grosch acknowledged that there are “many unknowns” inherent to a budget spreadsheet he presented on Monday such as the level of state education funding, local tax rates, possible changes on district payments to cyber charter schools and inflationary pressures.

He explained that audited financials showed a $361,000 deficit for the 2022-2023 school year and a projection for the 2023-2024 year deficit is estimated at just over $1 million.

The challenge with the budget on the expense side is that many of the expenses are hard-wired into what the district does.

Grosch said that wages total $33.8 million in the base 2024-2025 budget presented Monday while benefits are $24.6 million. Substitutes are a $1 million item. Cyber-charter payments total just over $7 million. Bond principal and interest is also over $7 million while $6.8 million is transportation, though some of that item is reimbursed.

“That’s $81 million right there out of the $94 (million),” Grosch said. “It’s going to take significant movement in thought process to reduce any of those items. There are some that can’t be reduced.”

On the revenue side, Grosch said local tax revenue is decreasing as assessed property values in the county decrease.

Local revenue is just shy of $28 million and the current state revenue totals $54.1 million.

Grosch explained that that figure is an estimate from the governor’s office.

“I don’t have much confidence it’s going to remain that number,” he said.

Total revenue – without any tax increases – is projected at $88.58 million, with a deficit just shy of $6 million.

“I believe in the 13 years I’ve been here, that’s the largest deficit I can recall,” Grosch said.

The budget projections presented to the board show that deficit at over $8 million in 2025-26 and over $11 million the year after that.

“At the current rate we’re at – the school district will be… bankrupt,” Grosch said, during the 2026-27 school year.

The board has scheduled budget work sessions for April 3 and April 10 to continue the dialogue.

“We don’t know what a lot of our revenues are,” Board President Paul Mangione said. “The guidance we get from the state is not a whole heck of a lot of guidance.”

It’s not a challenge that the district can tax its way out of. A one mill property tax increase generates about $400,000.

“The numbers we’re looking at here are pretty significant right now,” Mangione said.


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