School district budget runs low

The Oak Harbor School District Board of Directors adopted an approximately $40 million budget for the 2002 - 2003 school year at its board meeting and budget hearing Monday night.

Of greatest concern to both district officials and the board, as well as one vocal community member, is the low general fund balance as predicted in the new budget.

However, the two sides differ on where the blame lies for the fiscal dire straits.

According to the board president, the federal government is to blame for the steady decline of the ending fund balance over the past few years.

However, Scott Hornung, an Oak Harbor resident and former school board member, said the problem lies with fiscal irresponsibility of the board.

“We should have a fund balance of three million dollars,” said Kathy Jones, board president, Tuesday.

If the district spends 100 percent of budget, the ending fund balance would be about $685,000. The low fund balance is “directly due to the federal government’s Impact Aid,” Jones said.

The Department of Education, Jones said, regularly fails to issue Impact Aid payments in a timely manner. The DOE waits until all applications are in from federally impacted districts nationwide before final calculations and payments of Impact Aid are made. Oak Harbor, and any other district that really needs the money, can ask for emergency funding before the DOE’s paperwork process is complete, but the agency always holds back a chunk of the money pending final calculations.

The Department of Education now owes Oak Harbor School District millions of dollars in Impact Aid for the three previous school years and the upcoming school year.

“This year alone we haven’t gotten all our money, and next year we don’t expect to get it,” said Pam Ross, business director for Oak Harbor School District.

For the 2001 - 2002 school year, the district has received about $3.4 million in Impact Aid payments, but the DOE owes anywhere from $800,000 to $1.6 million more just for that year. While the Department of Education estimates that Oak Harbor School District will be entitled to as much as $4.2 million for the upcoming school year, Ross realistically expects the district will receive only about $3 million in a timely manner and may have to wait years for the balance. With every year, the total due piles up.

“In reality, (the payments) won’t all come in in one year,” Ross said. “They dribble in.”

Ross said she has told the Department of Education that the policy on funding Impact Aid needs to be revised. Jones, a professional accountant, agrees. She will head to Washington, D.C., along with board member Vicki Harring, in October, to lobby for regulatory changes.

Their mission this year, Jones said, will be to not only to lobby the district’s senators and representatives to approriate funding for Impact Aid, but to also lobby the Department of Education to adopt a policy that it will penalize districts that file after a deadline.

Additionally, Jones is looking to the district’s elected officals in Congress to introduce bills to both the Senate and the House of Representatives that, if passed, would make Impact Aid an entitlement.

“Education is not a special interest,” Jones said.

However, Hornung said the school board is to blame for the “alarmingly low” fund balance.

“Kathy Jones already has her scapegoat lined up,” Hornung said. “She’s trying to use Impact Aid and the federal government.”

Hornung says the board should have made some cuts to the budget, instead of fully funding programs and cost of living adjustments for certificated staff.

“The board didn’t have the guts to make any cuts,” Hornung said. “They wanted to go into the school year with all these programs in place.”

Hornung objects specifically to the district supplementing the Initiative 732 cost of living adjustment for teachers. While I-732 mandates the annual increase, the state only pays about 75-percent of the cost, Hornung said. The school district pays for the remaining 25-percent, or about $250,000, Hornung said.

“They’ve lowered the fund balance to pay for COLAs. That’s my interpretation,” Hornung said. “You only fund salary increases when you can afford it.”

However, if the board did order a COLA cut, the teacher’s union would have reacted vigorously.

Peter Szalai, co-president of the Oak Harbor Education Association, said Tuesday that the union would have fought against any action on the district’s part that would have resulted in a shortchanging of teachers’ cost of living adjustments.

Hornung also objects to the district budget because he says it fully funds programs with the hope of more money coming in later to pay for it.

“They took the highest risk,” Hornung said of the board’s adoption of the budget.

You can reach News-Times reporter Christine Smith at or call 675-6611

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