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Salem schools see open enrollment losses continuing

SALEM –The latest five-year financial forecast is out and Salem continues to see more students leaving the school district than coming in through open enrollment, but regardless, the district’s bottom line remains in the black the first four years.

Only in the fifth year, fiscal year 2021, does the final balance turn red and only to the tune of $153,810.

“That’s manageable to fix,” Treasurer Robert Barrett said.

Barrett delivered the bi-annual report to school board members recently during their monthly meeting. School districts across Ohio are mandated to prepare a five-year look at their finances every October, then prepare an update every May, in both instances looking at expenditures, revenues and how they may be affected over time. Districts can use the forecast as a tool for planning, keeping in mind that the state can change the funding formula on them and other factors related to funding can change.

During his presentation, Barrett noted that there have been four different types of funding formulas used for the last four state biennium budgets and right now they’re in the second year of a revised formula. Salem’s funding from the state is capped at the 2015 level even though enrollment numbers are going up, he said.

He’s expecting the district to lose close to $1 million from the state-funded reimbursement for the tangible personal property taxes that were cut out. He said the reimbursement will be greatly reduced throughout the 2016-2017 biennium budget or completely phased out. The district received $105,974 in casino tax revenue in fiscal year 2016. For fiscal year 2017, so far the district has received only one distribution for $54,401. He explained in his report that the casino money is considered soft money since the amounts can change.

Barrett announced the most recent numbers for open enrollment during his treasurer’s report, with the most recent net loss totaling $77,389. Open enrollment basically means a student who lives in the district can choose to go to a neighboring school district instead and their per pupil money goes with them and vice versa. A student from a neighboring school district can decide to come to Salem and their money comes with them.

“We’re on the losing side of open enrollment,” he said.

The forecast report said the majority of the students leaving were going to West Branch, Leetonia, South Range and United Local schools. Both board members and the administration have been looking at ways to keep students in Salem.

The forecast shows expenditures outpacing revenues in four of the five years, but with the cash balance acting as a stabilizer to keep the budget in the black with the exception of the final year. In the first year, fiscal year 2017, the difference between revenue and expenditures was $695,230. In the final year, fiscal year 2021, the difference is a negative number of $3.6 million. Adding in the cash balances, the first year ends with a balance of $3.2 million and the final year ends with the negative balance of $153,810.

The next five-year forecast will be issued in May when the report is updated.

mgreier@salemnews.net

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