Ohio remains firmly in the throes of the economic recession and analysts predict that recovery is a long way off. The state was able to postpone much of the financial pain in the current biennial budget but faces an estimated $8 billion deficit in the next two-year budget. Work to address this shortfall has been slow to start in the Statehouse. A bipartisan panel formed last fall to address the looming crisis will finally hold its first meeting next week, and last month Governor Strickland commissioned the KnowledgeWorks Foundation to seek cost-savings opportunities in K-12 education.

In schoolhouses across the state, the story is much different. Local school districts have been living with the pain for the last few years, pain that is getting worse. And despite a new state school funding model that promises billions in new education funding over the next decade, superintendents are preparing for funding cuts upward of 10 percent for the coming school years. Gadfly’s Mike Lafferty explores how local educators are slashing dollars to make ends meet, while still preserving the quality of education they provide to their students.

When teachers in the Southwest Licking School District agreed to a base pay freeze earlier this month they joined a growing number of teacher union local affiliates that accept the idea that the bustling economic powerhouse they grew up in has faltered.

School districts, some faster than others, are struggling to navigate an Ohio economy brought to its knees by chronic 10 percent unemployment, devastated property values, abandoned real estate, and an economic recovery so tepid economists actually recently rejoiced at an anticipated 3 percent increase in average wages over the next three years.

Pay freezes in education are becoming more common. Wealthy districts such as Oakwood, in suburban Dayton, have negotiated freezes. So have not-so-well-off ones like Leetonia in Columbiana County. In fact, Leetonia teachers have agreed to pay freezes in each of the last four years.

Transportation is another popular target for cost cutting. Medina schools have reduced busing to the state minimum. In Dayton, the school board is considering scaling back busing to help eliminate an anticipated $6.3 million shortfall in 2011. The Columbus Board of Education will close nine schools and reduce busing in order to keep a promise to the city’s voters and business community to cut $70 million in costs. But proving that threats still work, near Cleveland, in Shaker Heights, the highest-taxed school district in the state, voters approved a levy in May after the school board said 10 percent of the district’s employees would have to be furloughed if new spending wasn’t passed.

In Southwest Licking, a rural bedroom community near Pataskala in Licking County, the 3,900-student district is not filling vacancies and has reduced school budgets and classroom supplies.

“We have a librarian who can teach English so she’s going to be a part-time librarian,” said Superintendent Forest Yocum. Students pay to participate in extracurricular activities -- $600 per sport.

And the pay freeze for the coming year may not be enough. “For our five-year (financial) forecast, we have not built in any raises,” Yocum said. A levy that expired at the end of last year means the district could have to begin searching for more than $3 million in additional cuts for the 2011-12 school year. If the money isn’t replaced with a new levy in November, the district eventually could be forced to trim up to $8 million, about 22 percent of its budget. Even if the Southwest Licking budget levy had passed, the district would still have had to cut $600,000.

Southwest Licking is also a growing district. In the last five years it has added 485 students. The district’s middle school was built for 700 students and houses 900. The high school was built for 950 students and now serves 1,200.

Statewide, however, public school enrollments have been falling, especially in urban areas. In 1979 there were about 2.1 million students in public schools, according to the Ohio Department of Education. In 2009, there were 1.8 million – a drop of about 15 percent in 30 years.

State aid is likely to fall. Ohio is one of 46 states facing budget shortfalls. At least an $8 billion deficit is anticipated when the next two-year budget is hashed out. After escaping draconian cuts in the current budget cycle thanks to a one-time infusion of federal stimulus funds, state school spending is bound to be on the chopping block with anticipated cuts from a few percent to as much as 20 percent.

“If it’s an $8 billion to $10 billion (state budget) hole, how is that going to be filled?” said Scott Ebright of the Ohio School Boards Association. And with high unemployment, many of the 178 districts with school income taxes are taking a hit, he said.

Ebright said districts are realigning schools to make class sizes more uniform, outsourcing transportation and food service, consolidating purchasing with other districts and sometimes instituting joint hiring functions. Two districts – Rittman and Orrville in Wayne County have been sharing a superintendent and treasurer, along with other central office staff.

Real savings, however, mean reducing labor costs, which make up 70 percent to 80 percent of a district’s spending. West Carrollton schools, in suburban Dayton, have been reducing staff for years following a wrenching budget battle in 2003. “We we will never be in that situation again,” said West Carrollton Schools Superintendent Rusty Clifford. “It’s devastating to the community.”

Clifford said the district now looks years ahead to anticipate costs. For example, the district is planning reductions for 2013 when the board will ask voters to approve a levy. “Five of the last seven years we’ve reduced the budget. We’ve cut costs. The real savings are cumulative. Three years down the road a cut makes a big difference,” he said. That means when voters passed a renewal levy in May but rejected a second request for new money, the board didn’t have to wring its hands and threaten more cuts.

Cutting costs now is part of the district’s culture. “We’re on the ballot in November with the smallest millage in history,” said Clifford said. “We’re not threatening to reduce staff, cut transportation or athletics.”

It’s become the culture in the Columbiana County community of Leetonia, too. The district has been slashing budgets – and reducing staff – for years. Levies have failed seven times in the last two years, including most recently in May. The district has eliminated one principal position and nine teaching jobs as well as other positions since 2007 in an attempt to stay above water financially.

Columbiana County’s 13 percent unemployment rate is at least partially to blame, says Leetonia Superintendent Robert Mehno. “We now have two teachers teaching all math courses in the high school – six different courses,” he said. The high school also has only two science teachers to teach biology, chemistry, physics, anatomy, and physiology.

Menho said he is planning on a 10 percent reduction in state funds. The district receives more than 70 percent of its funding from the state and the last time voters approved a levy request was 1991.

However, at least one cost reduction had unintended consequences. When the district reduced bus transportation, Menho said nearby neighboring districts (there are three districts within six miles) sent buses into the Leetonia district to poach students. They picked up the kids and transported them out of the district to their schools.

Meanwhile, in Southwest Licking, Superintendent Yocum is still looking for ways to save. State auditors are examining district spending to make recommendations on what expenses could be reduced or eliminated.

“We may not be able to make enough cuts to be solvent,” Yocum said.

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