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The Press Newspaper

The Press Newspaper

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The Oregon City Schools district will lose millions in the next two years, according to Oregon City Schools Treasurer Jane Fruth, who provided financial information at a town hall meeting at Starr Elementary School on April 20.

The figures she provided were from the Office of Management and Budget that were incorporated into the Oregon City Schools District.

“This is the best we have right now. Obviously, these will change. We hope they will change for the better,” said Fruth.

The district will lose $1,779,463 in Fiscal Year 2012, and another $1,236,642 in Fiscal Year 2013 as a result of losses in State Foundation funds, Tangible Personal Property tax “hold harmless” payments, electric deregulation payments, and federal stimulus monies.

“House Bill 66 has had a huge impact on our district,” she said. HB 66, passed in 2005, phased out tangible personal property taxes over a five year period. The tangible personal property tax was a locally raised tax on business, inventory and equipment.

Districts were reimbursed in “hold harmless” payments over a period of years, she said.

But Gov. John Kasich’s proposed biennial budget will accelerate the phased out reimbursements, she said. The district last year received $6.5 million in reimbursements, which it will no longer get in 2019.

“This is significant. That is 17-percent of our General Fund budget, gone in Fiscal Year 2019. That’s a big deal. That’s re-shifting it back onto the local taxpayer. Where are we going to get this money? If they don’t pay this to us, it’s gone,” said Fruth.

Electric deregulation funds to the district are also being phased out, said Fruth. In 2000, the state legislature deregulated energy costs, but reimbursed the Oregon City Schools district over $800,000 per year.

One mill is equal to $595,024, she said. The district will be down 11-mills without the $6.5 million in tangible personal property tax reimbursements, and 1.46-mills without the $868,319 in electric deregulation funds.

“That’s an awful lot,” she said.

The prior state biennial budget included federal grant monies of $590,000, which are no longer available, she said. An EduJobs grant of $518,908 is available for Fiscal Year 2012.

The district has been planning for most of the cuts in the short term, said Fruth.

“We’ve really been working to reduce our expenditures. But the problem comes with the continued loss of $6.5 million. That’s a lot. That will have a huge impact on our community. We’re not asking for money to increase our expenditures. We’re just trying to hang onto the revenue we’ve been having in previous years. The bottom line is that we can’t cut our way totally out of this deficit. It’s 17-percent of our revenue,” she said. “This is a real hardship to our community.”

The district receives $19 million just in revenue from real estate taxes, she said. The district has a total budget of $40 million.

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