Some Ohio schools battling financial crises
MONROE — The blue-and-gold mascot of the Monroe Fighting Hornets was depicted on the school room wall, hovering over lists instructing children how to behave in the hallways, bathrooms and on the school bus.
The hornet looked mad.
Standing next to the lists was David Neeley.
He looked mad, too.
He was there to speak to the newly appointed committee that will oversee the school district’s spending while developing a plan to dig it out of the hole that had just gotten it declared by Ohio’s auditor to be in state of fiscal emergency.
Many Ohio schools are struggling to stay with their budgets after the recession sapped housing values that provide local school tax bases, the state cut funding, and the rough economy made it harder to get taxpayers to pass new levies. And some districts just can’t make the books balance. Eleven Ohio districts have fallen into the emergency status since 2007, and Monroe in May became the sixth Ohio school currently in that financial crisis mode.
It’s a not a good place to be — it usually means lost jobs, reduced classes, activities and services for students, and higher fees and taxes for residents.
“That was devastating to me,” Neeley said, describing when he first read about Monroe’s fiscal crisis a few months ago. He blasted school officials for not being cautious with their budget, not following “simple math — you don’t spend more than you have.”
Kelly Myers, named to represent Monroe parents on the five-person emergency committee, said she can understand people being upset.
“You look around in the crowd. … It kind of breaks your heart from all ends of this,” Myers, a longtime school volunteer who has an insurance agency in this southwest Ohio city of some 13,000 people. “It’s going to be a hurtful situation. Nobody is going to be happy.”
Ohio education officials say there have been 38 fiscal emergencies — Ohio has 614 school districts — since the status and a state fund were established some 15 years ago so troubled school could borrow money without paying banks’ interest and fees. The new price the schools pay is yielding financial control to state-appointed committees that oversee austere spending and a plan to get and stay solvent and to pay back the loans. Typical moves: cut administrative, teaching and support staff jobs; slash bus service; trim art, music, and foreign language offerings; jack up pay-to-participate fees.
“It gets ugly,” said Roger Hardin, assistant director of finance program services for the Ohio Department of Education. The typical stay in the status is three-four years; the urban East Cleveland schools and rural Meigs County Southern Local schools needed several years longer to get out.
But the status gives the schools a chance to plan and figure out what they need to do to resolve problems that otherwise would only get worse.
“Most districts, when they emerge, come out stronger fiscally,” Hardin said.
He said given the recent weak economy and state funding cuts, having only six districts still in the status doesn’t seem too bad.
Unless you’re in one of them.
“We’re worried about our children’s education,” said Patti Horvat, mother of a Monroe high school student. “A lot of good teachers, a lot of good people had to be let go. Most people here are very strapped.”
Formed just 12 years ago in an area near Interstate 75 where subdivisions have been sprouting on former cornfields, the district and its new K-12 building, top-of-the-line football stadium and other facilities have been a source of local pride. It has earned state “excellent” academic ratings and the school hosted community gatherings and state sports playoff games. Enrollment has doubled, to nearly 2,500 students.
Now the district needs more money — a lot more — and is making cuts as it faces a $2.2 million annual operating deficit and a $3.2 million bond debt that must be repaid over five years. Revenues last year were some $18 million. Nineteen jobs have been eliminated, and pay-to-play fees jump from $300 a family per school year to $250 a child, per sport.
Neeley said flatly he opposes giving another dime to the district after it got into such a mess. The retired electrical worker, 72, said he will go door-to-door campaigning against the 7.05-mill August levy — if passed, it should raise some $2.5 million a year while costing homeowners an estimated $262 more a year for each $100,000 of their property’s value.
Leaders in nearby Little Miami Schools are familiar with frustrated feelings. Voters in that area northeast of Cincinnati rejected eight tax issues before last November approving a whopping 13.95-mill levy, adding $427 taxes on every $100,000 of home value. That should allow the district to emerge from fiscal emergency later this year. The district had closed school buildings, cut busing, dropped classes and activities, and raised pay-to-play fees to $651. The levy has allowed some restorations, but they still are under pressure from the emergency committee — as well as their community.
“There are people who tell us ‘don’t spend money foolishly — we’re watching every cent you use,’ ” said Bobbie Grice, Little Miami school board president. “We’re not going to do anything that will make them not trust us.”
That’s the challenge now at Monroe Schools, where officials say most of the trouble stems from faulty financial forecasts and mistaken diversion of building construction bond funds to everyday expenses, problems that began years ago.
“It was shocking at first … very disheartening,” Elizabeth Lolli, superintendent since 2008, said of learning the extent of the problems. “The district is working very hard to put safeguards in place to make sure it doesn’t happen again.”
Mike Watson, a retired Hilliard Schools treasurer and state consultant who heads emergency committees, said he wasn’t sent to Monroe to point fingers.
“It is what it is,” Watson said. “There’s a problem. Let’s get it taken care of.”