District faces budget shortfall

By Tom Fontaine
Herald Staff Writer

Hermitage school directors, administrators and educators have about a month to iron out a budget for next year.

“Right now we are short of a balanced budget and we’re searching for ideas,” Superintendent Dr. Louis C. Mastrian told the board Monday.

According to rough budget estimates, the district would spend about $1 million more than it would bring in next year.

“The budget affects everybody. We don’t want to cut programs at the expense of the children.” Directors and Mastrian reviewed the figures with members of the Hermitage Education Association. Mastrian called the discussion a collaborative “brainstorming activity.”

A preliminary budget will be presented to the board next week and the final budget will be on the June agenda, Mastrian said.

District Business Manager Gene Fornadel said a leveling off of assessment values in the city has had the most negative effect.

Mastrian agreed. In 1993-94, he said property assessments totaled about $61 million. This year the total was about $73.5 million, but next year the total will climb just slightly to $73.8 million, he added.

“That’s what brings us our money,” Mastrian said. “The increases are not there this year.” Increasing salaries and paying off building project bonds will also work against the budget, but Mastrian said the district has about 10 percent of the budget to work with and about 90 percent is “fixed.”

Expenditures are projected in the preliminary budget at about $19.3 million. Revenues are figured at about $18.3 million.

The $1 million gap could immediately shrink to about $700,000 if the district decides to apply $300,000 from its fund balance, or savings.

State and local auditors have recommended that a district should keep at least 5 percent of its overall budget in a fund balance, Mastrian said. At that percentage, Hermitage should keep no less than $900,000 in its fund balance. It has $1.2 million projected for that fund.

The $700,000 difference reflects about a 10-mill tax increase — a hike Mastrian and directors agreed would not be passed or presented in June. There could be some increase, but Mastrian said, “We want to keep it as low as possible ... and consistent.”

The last three hikes, which included a 1.5-mill increase in 1999-2000 and 3.75 mills in 1998-1999, have been related to the high school building project and designated for bond indebtedness.

Mastrian said the increases were absorbed by the fund balance. “We had increased revenue that resulted from (assessed valuations),” he added.

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