Prepared Text for Board Meeting  (Levy thoughts)

June 8, 2009

Marc A. Schare

 614 791-0067

Work -  614 791-1779 Fax



Tonight, we need to move off the question of “what happened” and start addressing the question “what now?”. 


Elections have consequences. Certainly, we can guess as to why the levy failed, but ultimately, it doesn’t really matter. Voters, through their votes or non-votes rejected business as usual and by extension, they do not want another status quo levy attempt.


Let’s take a look at what the most recent forecast is telling us. The good news is that we have strong cash reserves. They will carry the district past FY2010, past FY2011 and into the 2011-2012 school year. While I anticipate a summer long discussion of cuts partially designed to show the community that we mean business, I hope we recognize that we really do have a margin of error. It may not be a big margin of error, but it is certainly there in that there are scenarios where a 2009 levy can fail but a 2010 levy passage can make up the difference and we can maintain our current spending plan through 2012. I hope we can undertake a process of forecast validation before determining the amount of cuts that might be required should our next levy fail. Speaking just for me, I won’t vote for a single “levy-fail” cut until we go through the forecast line by line and see if anything can be trimmed. For example, we can transfer a million dollars of bond interest into the general fund tomorrow and turn a 7 million dollar problem into a 6 million dollar problem and if we throw some contingency money at it, we could make it a 4 million dollar problem. Even removing the $100K natural gas surcharge could be the difference between a program being sustained or a program being cut. My only point here is that we have options.  


What else does the current forecast tell us? Even with a 7.4 mill levy passing in 2009, we will be deficit spending pretty much forever. In fact, even with that 7.4 mill levy and another 8 mills in 2012, we will be spending about 10 million dollars more than we are taking in each year of the revised forecast starting in 2012.  In fact, this scenario, 7.4 mills in 2009 and 8 in 2012 would still result in the district requiring a third levy in 2013 to balance 2014 and beyond. Let me repeat that. The current five year forecast shows a requirement for Worthington Schools to enact three levys in the next 5 years if the first two are below 8 mills. Of course, we can always try for a larger millage, however, the forecast demonstrates that even a 12 mill levy in 2012 would be insufficient to avoid a 2014 levy. It appears that our most likely scenarios would still result in a return to the every other year levy cycle starting in 2012.


To be sure, there are many things that can happen between now and then. We can believe the Ohio House that the Governor’s plan will be fully funded and give us free money in two years. We can believe the Ohio Senate that tangible personal property taxes will not be phased out. We can hypothesize that we will see an above average number of retirements as a cost saving possibility, but hoping is not planning. In my view, the likelihood of getting significant new dollars from the state anytime soon is very slim and without some tangible evidence, it would simply be irresponsible to assume that some event will take place that would result in the above “chicken little” scenario not happening.  


So, here is what I’m looking for. To me, the most important short term goal is the recognition that a long term problem exists, that sustainability and affordability are as a high a priority goal as any other in the district and that no easy fixes are coming. Without that recognition, I fear our district will proceed with a status quo 7.4 mill levy and,  assuming it passes, resume business as usual. By the time financial Armageddon is upon us, it will be too late. If we agree that a long term spending problem exists, we should use our time together this summer to discuss efficiencies that can be implemented regardless of the outcome of a levy. The changes may be painful and politically unpopular, but to not consider them is doing our constituents a disservice. We also need to recognize and when I say “we”, I mean all of us – parents, staff, students and taxpayers that the only real way to slow the rate of increase in district spending is in salaries and benefits. I’m sorry if that sounds offensive, I mean no disrespect, but it doesn’t matter how good our teachers are or how much we respect their work if Worthington can’t afford them. Over the last 7 years, the median income in Worthington has dropped. We see this in the number of kids on free and reduced lunch and we see it in what we euphemistically call the “changing demographic” of the district. The state may see us as a rich, suburban school district but our demographics may tell a different tale. We need to correlate our spending with the ability of our residents to pay. Realizing this as a fundamental truth would be a good start towards a sustainable and affordable school district. I’m not talking about concessions and I’m not talking about givebacks although any help would be cheerfully accepted, I’m talking about slowing the rate of increase to something approaching the inflation rate and managing to that level.


In summary, going into the June 26 retreat, I would like our administration to put together a plan for how the district can be run in a sustainable and affordable fashion with reasonable levys below 8 mills at reasonable intervals of not less than 3 and preferably 4 years. What would that district look like and how could we get from here to there.


These notes should not be construed as Marc being against a November levy so let me be clear.  I have no problem justifying a levy that would result in our first new local operating dollars in five years, but only if there is a plan behind the tax that would demonstrate to residents that operating levys won’t be an every year or every other year occurrence in the district, or be of eye popping millages  anytime soon.


I look forward to continuing these discussions later in the month.