COLUMBUS — Most Richland County school districts will see an increase in state funding during the next two school years, but some say its not enough to erase operating deficits.
Local school districts operate on a combination of local, state and federal funding. A district’s state funding amount is determined by a formula developed by the legislature and passed in the state budget every two years.
House Bill 33 outlines the state budget for the next two fiscal years. Operating appropriations took effect July 4.
What is a fiscal year?
Investopedia defines a fiscal year is a one-year period that companies and governments use for financial reporting and budgeting. The Ohio government as well as Ohio’s public school districts operate on a fiscal year that runs from July 1 to June 30. A fiscal year is named for the year it ends, so fiscal year 2024 would be July 1, 2023 to June 30, 2024.
The formula is designed to calculate the cost of education per student based on a school’s student/teacher ratios, minimum staffing levels and actual costs.
In addition to per-pupil funding, the state also provides additional funds based on a school’s student need and demographics. Schools receive funding specifically to support students with disabilities, English learners, gifted students, economically disadvantaged students and those participating in career technical education.
Crunching the numbers
In that bill, Ohio legislators chose to continue the “Fair School Funding Plan,” (FSFP) an updated formula for funding schools that made its debut in the last biennial budget.
Public school districts operate on a combination of state funds, local tax revenue and federal funds. Schools in Richland County receive their largest funding shares at the state and local level.
Ontario, Mansfield City and Madison will see the largest percentage jumps in their state foundation funding.
Mansfield City Schools to receive additional $3 million
Mansfield’s City’s state allocation will increase by just over 11 percent this school year, resulting in an additional $3 million in revenue.
Mansfield City Schools treasurer Tacy Courtright said the increase puts the district in a better place financially.
Nevertheless, the Mansfield City Schools’ most recent five-year forecast still projects multi-million dollar deficit spending through 2027.
Courtright projected the district’s expenses will exceed revenues by $2.25 million in fiscal year 2024 and $4.7 million in fiscal year 2025.
The treasurer said the district is continuing to look at ways to stretch its dollars and reduce spending.
“The biggest expense for our district is salaries and benefits for our staff,” Courtright told Richland Source in July.
“We had some retirements this past school year and we carefully evaluated each vacated position to determine if it was essential that it be refilled.”
Courtright said the district was also able to reduce the non-salary general fund budget by six percent from 2023 to 2024.
“Through these reductions we intend to save approximately $1 million through unspent carryover purchase orders and the budget reductions,” she said.
The district is also working with Moody Nolan architecture firm on a master plan that will focus on best utilizing district facilities and finding ways to increase efficiency, Courtright said.
Madison Super: We’ll still need a levy on the ballot
Madison will see its state funding increase by 11.5 percent this fiscal year, with an estimated state funding of $30,330,068.
Supt. Rob Peterson said the district appreciates the legislature’s decision, but it won’t keep Madison from putting a levy back on the ballot this November.
Madison residents voted down an 8-mill continuous levy in May. It was the district’s first attempt at a new operating levy since 1997.
“Further implementation of the Fair School Funding Plan and updating the data used to calculate the base cost per pupil positively impacts our district finances,” Peterson said in an email.
“However, even with the increase that we will receive in state funding, we will still need to be on the ballot for a levy in November to preserve and protect current district programs.”
District Treasurer Bradd Stevens forecasted a $3 million operating deficit for fiscal year 2024 and a $2.1 million deficit for fiscal year 2025 in the May five-year forecast.
Lexington Local Schools will see a 13 percent increase in state funding this fiscal year, resulting in an estimated $9.9 million.
“We appreciate all of the hard work and advocacy that went into the passage of the state budget,” Lexington Treasurer Jason Whitesel said.
“With the rising costs of public education across the board as part of the current economic environment, it’s important that the State provide a fair funding formula to help mitigate the financial burden to our community as we do the important work of providing the best education possible to our students.”
While Ontario’s state share remains low compared to other area districts, its state foundation amount will increase by nearly 25 percent this school year and 10 percent the following year.
Ontario Treasurer Randy Harvey said the boost will put the district in the strongest financial position he’s seen in his three decades as treasurer of Ontario Local Schools.
“We’re thrilled,” he said. “For the first time in all these years, I feel (the state funding formula) represents what it takes to educate a student.”
Ontario Supt. Keith Strickler said the district will remain financially efficient. He said he hopes to put the extra funds towards some facilities projects that were deferred when funds were low.
Crestview Local Schools and Lucas Local Schools are the only districts that won’t receive additional state funding during the next two years; however, neither will see state funding cut.
Both rural districts have some of the highest spending per pupil amounts in Richland County, according to the most recent Ohio School Report Cards.
What is the Fair School Funding Plan?
The Ohio Supreme Court ruled in 1994 that the way the state funds public schools is unconstitutional because it relied too heavily on local property taxes.
Supporters of the Fair School Funding Plan, including local teachers, school administrators, school boards and statewide education associations, say the updated formula fixes the constitutionality issue.
The Fair School Funding Plan also takes into account a district’s local capacity to fund its school system. The formula uses metrics like assessed property values and adjusted median income, Harvey explained. School districts with lower property values and income receive greater state funding shares.
The FSFP was first included in the biennial budget for fiscal years 2022 and 2023, when lawmakers agreed to “phase it in.” Rather than giving schools their full formula amounts, districts received 16 percent in 2022 and 33 percent in 2023.
Under the new budget, schools will receive 50 percent of their formula amount during the 2023-2024 school year and 67 percent during the 2024-2025 school year. The new budget also updated formula inputs for certain costs.