The treasurer of the Oregon City Schools District has projected a 3-percent drop in revenues over the next five years. Treasurer Jane Fruth at a school board meeting last week gave an update in the district’s five-year forecast, which projects a drop in state foundation funding, property taxes, and electric deregulation funds. “The big areas you have to pay attention to on a five-year forecast for school districts are real estate taxes, state foundation, property tax allocation, and salaries and fringe benefits,” said Fruth. The district gets two payments of $9 million per year in property tax revenue, she said. Five years previously, the district received a 5-percent increase due to a levy that was passed in 2008. “We got the first half of it in 2009. I’m making a rather flat projection. Everything I’ve seen and heard implies that valuations could drop. There is still a lot of property for sale. I do know what will help us a little bit is that farm values will go up, which will help offset the losses we have in our home values. Real estate taxes are incredibly flat, which actually is a new phenomenon. We used to get a little bit from inside millage, but it’s fairly flat,” she said. State foundation funding is also flat, she said. The district received stimulus funds, but state foundation funding was later cut by $500,000. The district, as will other school districts in Ohio, will be taking a big hit in tangible personal property tax allocation, she said. In 2005, the state legislature decided to eliminate tangible personal property taxes – taxes on business machinery, equipment and inventory – which were allocated to schools. As a result, the state made “hold harmless” payments to districts to make up for the shortfall. Those payments are going to be phased out. “This is a key issue for all of us. In fiscal year 2007, we had $7.7 million coming in. The state was going to hold us harmless for the money we lost. With this current state budget, they decided to reduce the hold harmless money, so we’re going to be seeing significant reductions, almost $700,000 per year in personal property taxes,” she said. The district also will no longer receive funds from electric deregulation, she added. “The big surprise for everyone is we used to receive $800,000 per year for our electric deregulation. A number of years ago, they changed the way they taxed electric companies. They took that away as well. That was truly unexpected. We weren’t anticipating that,” she said. Fruth said the five-year forecast for salaries and wages is somewhat confusing due to the number of pay cycles in the next few years. “It’s a little confusing because we say we aren’t having increases, but we do have the 2-percent for step increases that are provided. It does look a little confusing. It has to do with the number of pay cycles in the fiscal year, so it’s a little awkward,” she said. The district is looking at a 3-percent decrease in the revenue stream in the next five years, she said. “We’re working to keep our expenses from increasing below 3-percent,” she said. The Ohio Department of Education asks that school districts keep between 30-90 true cash days – the number of days the district could keep operating without any revenue. For FY 2012, the number is 70, then 53 in 2013, then 18 in 2014, she said. “Then we do get into the negative,” she said. “In summary, the forecast is showing the trends. We’ve been pretty flat in revenue and we’ll be slowly declining,” she said. The expenditures in the district have gone down due to cuts made by the school board. “Eighty-percent of our expenditures is going to be on salaries and fringes. We’re a service organization. You’re not going to change that,” said Fruth. “The bottom line is that we are in a better situation. But it’s primarily due to our reductions and the work we’ve done and the insurance impact taken on by our employees. That was a big deal. It saved us a great deal of money,” she said.