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Akron must pass levy and make cuts to avoid deficit

By admin Published: October 25, 2011

If Akron voters do not approve a new tax levy next month, the school district will be nearly $22 million in the hole by the end of the 2012-13 school year.

Akron Treasurer Jack Pierson estimates that the hole will be almost $176 million deep within five years, according to the forecast approved Monday by the Akron school board.

But passing the levy alone won't solve Akron's financial problems.

Pierson projects that even if the levy passes, the deficit in 2013 still will be $724,000 and will grow even wider, ending with $112 million in the red in five years.

This is why the school board decided this summer that the projected gulf between Akron's income and expenses was too great to bridge with either tax hikes or budget cuts alone.

The district has a 5.5-mill levy on the Nov. 8 ballot that would bring in about $14 million a year. The district would collect half of it during the next school year, then the full amount each year after that. The levy would cost the owner of $100,000 home about $168 more a year, a 14 percent increase in school-related property taxes.

If the levy passes, the district also will need to cut about $9 million a year for three years.

Superintendent David James is confident that the district can trim $10 million in the first year by trimming employee health insurance costs, which currently cost the district about $47 million a year.

District employees do not pay anything toward premiums, but a committee of union presidents and district administrators already has saved $1.5 million in previous contracts by focusing on increased deductibles and co-pays. The committee has found another $2 million in savings that will go into effect July 1.

The next round of health-care benefit cuts probably will involve union members contributing to premiums. James said the district is trying again to include higher deductibles and co-pay options to better accommodate individual circumstances.

Unions would have to contribute 15 percent to the premium cost if Issue 2, the referendum on Senate Bill 5, passes in November.

James said that could hurt his ability to negotiate a more balanced way to save possibly more money on health care.

''If they're talking about flexibility, give us some more flexibility in coming up with that 15 percent,'' James said.

''So am I going to be able to get other modifications out of the plan from our employees, if it passes, who are going to be pretty upset?'' James said. ''I don't think so.''

Pierson projects base salary to remain frozen with only step raises for years of service and the attainment of advanced degrees.

The district also plans to consolidate administrative offices and close some schools, probably elementary schools, but those closures won't be announced until next year, James said.

Class sizes also could go up too, even at the elementary level, to reach the $27 million needed if the levy passes.

''If we just went to 30 maximum across the district at elementary alone, we could cut 60 teachers, but then you have 30 kids in the classroom,'' James said. ''We've always had the position that that's not such a good thing, primarily at kindergarten when kids are just starting. But the reality is that everyone will feel the pain.''

The average class size in kindergarten through sixth grade across the district is about 21 students.

Enrollment has steadily dropped in the Akron school district for a variety of reasons. As of this month, about 22,000 students are in Akron's buildings. An additional 3,448 students who live in the Akron district are attending charter schools. Another 716 attend private schools with vouchers.

Pierson expects another 200 students a year to go to charter schools or private schools with a voucher.

The loss to Akron's budget this school year, about $26.2 million transferred to charter schools alone, is more than the projected deficit next year. The reduced enrollment doesn't neatly translate into reduced expenses, however, because the students don't all leave a single building that can then be closed.

Pierson said Monday that he's not sure $27 million in cuts over three years will be enough, even if the levy passes.

''It's probably going to have to be higher than that: a minimum of $9 million and probably more than three years,'' Pierson said.

If the levy fails, the district would have to cut at least $45 million to balance the books.

John Higgins can be reached at 330-996-3792 or jhiggins@thebeaconjournal.com. Read the education blog at http://education.ohio.com/.

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