In a news release, Superintendent Dr. Anthony Trosan cited that as one of the most significant factors contributing to the estimated $2 million spending deficit for the coming school year.

He added that the estimated $900,000 transportation subsidy from the state was included on the revenue side of the budget draft, making the mistake even worse.

Transportation costs have always been a huge part of the Reynolds budget because it encompasses more land mass than any other district in Mercer County. It stretches from the northwest tip of West Salem Township at the Ohio line to Fredonia in the east, with Pymatuning and Delaware townships in between.

The forgotten transportation costs were just part of Trosan's explanation of how the anticipated budget deficit came about and how it will affect students.

Another significant error, he said, was that the property tax-collection rate was estimated at 100 percent, instead of a more realistic 91 percent. That meant revenue was overestimated.

He did not say who made the errors.

The likely effect of the deficit on students, he said, will be a slight increase in class size and adjustments to some educational programs. There also will be substantial changes in administrative responsibilities, he said.

According to Trosan's news release:

The school board's finance committee found out April 17 that the district was facing a deficit of about $1,100,000 for 2002-03.

At that time, the finance and personnel committees agreed that three retiring teachers would not be replaced because of a projected decline in enrollment. They estimated that would save the district $225,000.

A few days later, Pennsylvania lawmakers changed the amortization of the state teachers retirement fund, saving the district about $175,000 in anticipated payments for next year.

Board members believed at that time, that the combined $400,000 savings, along with pruning the proposed budget and a moderate tax increase, would balance the budget.

On May 1, the committee discovered the deficit had ballooned to $2,100,000.

The board immediately had its auditors from Black, Bashor and Porsch of Sharon review the budget. They found the mistakes.

Besides the transportation and property tax errors, Trosan said other contributing factors to the deficit include:

• Decreases in state and federal funding.

• Large increases in spending for tuition and other charges for students in special education, charter schools, cyber schools and vocational-educational schools.

• Contracted pay raises of 4.7 percent for teachers and 4.3 percent for nonteaching employees.

• A 14-percent estimated increase in the cost of employee benefits.

• Significant increases in insurance and utility costs.

• Reduced revenue from investments.

• The $500,000-plus annual debt on the building project bond package.

• Continued mandates by the state and federal governments, which lawmakers do not fund.

That audit prompted board discussion and analysis of deficit spending for the last four years, the release said.

The analysis revealed former board members received limited or incorrect information about revenue and expenses and a pattern of deficit spending that depleted the district's savings.

During those four years -- 1998-99 through 2001-02, student enrollment declined, while the number of teaching, administrative and nonteaching positions increased.

According a timeline provided by Trosan, who took over last July 31:

The board's finance committee chairman Maddox Stokes was superintendent in 1998-99.

Former Superintendent Dr. Charles M. Cagno was hired in March 1999, began working as an unpaid consultant to the district that May and began his term as superintendent that July 1.

In Cagno's first year on the job, two co-principals, a technology administrator and a director of curriculum were hired.

In the 1999-2000 budget, which Stokes prepared, two revenues were underestimated by $400,000 -- special education and rental subsidy or bond reimbursement. The district spent its fund balance, or savings, to cover the shortfall.

The district then began 2000-01 with a fund balance on the books that was off by $400,000.

Cagno retired on July 2, 2001, following a turbulent two years during which he was sued by two administrators and the Pennsylvania State Education Association, alleging he violated the state Whistleblower Law. He also was suspended by the school board for misusing school property and vehicles. The violations were discovered as a result of an audit conducted by the state Auditor General's Office of Special Investigation.