Each year in May, Treasurer Jack Pierson prepares a five-year financial forecast for Akron Public Schools.
It’s not an easy job, particularly in the years that the legislature and governor are writing a new two-year budget and can totally revamp the school funding formula in June — weeks after Pierson and every other school treasurer must file their projections with the Ohio Department of Education.
At the moment, Pierson is a little more optimistic than he was a few months ago.
And he attributes that to a possible change in the number of students who are leaving the district for privately run charter schools, open enrollment and private schools.
He told the board recently that the “biggest variable isn’t the revenue; it’s the expenditures.”
He said that about 23 percent of the operating budget is driven by fluctuating prices for purchased services, among them fuel costs and utilities.
The other huge factor is enrollment.
For each student living within the Akron school district, there is on average $7,129 in state funding available, according to Ohio Department of Education data.
For each student who leaves to attend elsewhere, that money goes with him or her. It’s a deduction, or similar to an expenditure.
Today, nearly 6,000 students have left Akron to go elsewhere, and about 22,000 students remain in the district.
The number of students who have opted out of the district through open enrollment, charter schools or vouchers to private schools has nearly quadrupled since 2000, according to state enrollment estimates.
As the students leave, the district must reduce staffing and cut programming.
At the school board’s meeting this week, Pierson had what was considered positive news for the first time in a long time.
“This is one time that I get to give you good news,” Pierson told the board.
He said he believes the exodus of students to charter and private schools is slowing, and that means the district will be losing less money, too.
He had been using historical withdrawals to project that the district would lose about 358 additional students a year to vouchers, charters and open enrollment through 2017 — a net loss of about 1,500. He’s scaled that back to 125 a year, or about 500 over the same period.
That, coupled with other projections, means the district may delay by one year the point at which it will use up its cash balances, from 2015 to 2016.
However, although he anticipates about $5 million more in revenues in 2017, the district is likely to experience a $52.7 million deficit at that point unless there are immediate cuts. The deficit takes into account a 7.9-mill levy approved last November to raise an additional $19 million a year.
He said the district needs to reduce expenditures $10 million to $12 million annually beginning next year. Those cuts could include staff reductions and school closures.
He cautioned, however, that the wild card is whether enrollment transfers to other schools are as he projects. If the budget now under consideration in the legislature suddenly includes more money for charters and vouchers, there could be a negative impact on Akron.
“Hopefully the trend this time is going to go down,” he said.
Doug Livingston can be reached at 330-996-3792 or email@example.com.