The Akron school board approved and submitted to the state this week its five-year financial outlook — written mostly in black ink.
After dwindling to $13.6 million last year, the end-of-year cash balance is now expected to double to $27.2 million by 2018.
“This turnaround was due to our taxpayers generously passing a 7.9-mill levy in November 2012 and the state increasing our funding in each year of the forecast,” according to Treasurer Jack Pierson.
The full impact of the levy is expected this year.
Last year, when the county first collected the new tax, Akron schools missed out on some tax dollars after the city had promised tax breaks on business developments. As the value of these commercial properties increased, the city exempted what would have been a proportional increase in taxes.
“The county took money away from us and gave it to the city,” Pierson said.
This resulted in the lowest tax collection rate, as defined by the school district, in Pierson’s 21 years of leading the finance department at Akron schools.
Pierson, who retires this summer to take the same job in a suburban school district in Trumbull County, said the collection rate has rebounded this year.
But a three-year property assessment will likely undercut that collection in the following years.
The county conducts three- and six-year property assessments, adjusting values up or down to reflect the actual worth of property. Pierson expects an 8 percent drop in home values and a 5 percent drop in commercial properties when the assessment is completed.
The result will be a roughly $6 million decline in local taxes collected for education. Legislation currently under consideration would prohibit Akron and other schools from challenging large decreases in property values, which could result in less funding, more levies and higher tax bills for homeowners in some school districts.
The revenue drop, however, is erased by an additional $35.6 million in annual state aid expected by 2018.
“That assumes that the state is not going to change the funding formula,” Pierson cautioned. “If they change the funding formula like they have in the past, all the projections are going down the tubes.”
Another variable that clouds projections in most urban schools is the unknown loss of students and funding to school choice, including private and charter schools.
The state expanded in the last budget the eligibility in a statewide private voucher program. Once available only to families attending academically inferior schools, public funding for private school is now available to low-income families.
Pierson projects a 66 increase in these private school vouchers, which now divert $4,250 per student. His projections also assume that 100 additional students will leave each year for charter schools, which draw on average $8,195 per student from Akron’s coffers.
Doug Livingston can be reached at 330-996-3792 or email@example.com.