School finances show signs of stabilization

June 23, 2010 —

There may be good news for Hudson Area Schools in an item that mostly goes unnoticed from year to year.

Monday night the Hudson Area School Board met to approve a loan to meet payments over the next several months. While the state only sends out aid payments in ten months of the year, many school bills come monthly, and the only way to keep cash flowing is for the schools to borrow money.

It wasn’t always that way. Several years ago Hudson Area Schools had enough fund equity that they could dip into the funds over the months that state aid wasn’t flowing to be able to meet their bills. But, with deficit budgets due to increased state aid cuts, those days had to come to an end.

The good news, Dr. Michael Osborne pointed out, is that each year over the last several years it has been necessary to increase borrowing each year. But, not this year: “We are borrowing no more than last year, and we foresee it going down in years to come,” Osborne said. “It really looks like we’re going to be able to reduce that in the future. The goal is no borrowing at all, but to do that we will have to build fund equity.”

Osborne explained Tuesday morning that there has been a great decrease in school spending over the last year. “From one year to the next there has been a difference of 1.3 million dollars. It’s amazing what we’ve been able to cut back.”

He explained that while final figures are not in, a school pre-audit examination indicates that while the schools are not reducing their deficit, they’re not adding to it like has happened in the past few years.

“We almost balanced the budget this year,” Osborne explained, indicating that it was a big improvement over what was expected a year ago. “While next year has the potential to be the worst year ever if the state carries through the budget cuts they have been talking about, we have planned for the worst and we feel we can make it through successfully. We are in a serious situation, but we are weathering it very well.”

Osborne said that unless something surprising comes along, he doesn’t foresee anything worse than has been planned for next year already. “It’s not like the bad times are over with, because they aren’t,” he said. “What I’m trying to say is that the school budget problems either for the local district or the state won’t be solved in one year, but the financial position of the Hudson district will continue to improve over the years, if people will stick together and work together like they’ve done in the past.”