Public schools across the Chagrin Valley and Geauga County were among the districts hardest hit by unexpected budget cuts announced last week by Ohio Gov. Mike DeWine as part of a $775 million reduction in state spending due to plummeting revenue after the coronavirus pandemic shutdown over the last two months.
Kindergarten through 12th grade statewide foundation payments got the largest hit at about $300 million.
Gov. DeWine said that the cuts are for this fiscal year, which ends June 30.
Cuts will add up to $1.34 million for Solon schools, $1.21 million for Mayfield, $533,732 for Chagrin Falls, $719, 964 for Chardon and $611,190 for Orange, according to state figures.
“Any cut to education is difficult, but we have an obligation to do our best to balance these cuts and to protect the most vulnerable of our students, and we intend to do that with these cuts,” Gov. DeWine said in a press conference on May 5.
Local officials expressed concern about the sudden decrease in state funding.
“We’re hopeful that after time and conversations with the [Ohio Association of School Business Officials] maybe they can convince [Gov. DeWine] to reconsider what he’s doing or find another alternative way of making it less inequitable,” Kenston Local School District Treasurer Paul Pestello said.
According to the Ohio Office of Budget and Management, the largest cut per pupil for any district in the state was $304. Orange, Kenston, Mayfield, Newbury, West Geauga and Chagrin Falls school districts were among the 19 statewide on the list for the largest cuts. Solon was not far behind with a $302 per pupil cut.
Public schools were targeted because they represent one of the largest segments of the state budget, officials said.
The Orange City School District was expecting $1.58 million in state foundation aid, but that amount was cut by $611,190, according to Treasurer Todd Puster. That represents a 38.8 percent cut in state funding.
He said that the state foundation aid is paid out in 24 installments and there are three remaining payments in this fiscal year. Orange was supposed to receive $200,000 in aid. The recent cut leaves a $400,000 difference meaning the district likely would have to return the money.
Mr. Puster was unsure how this would be accomplished. There has been some discussion about writing a check to the state or continuing payments into fiscal year 2021.
“There’s a lot of confusion and a lack of understanding about how this is going to be implemented,” he said.
Superintendent Lynn Campbell said that Orange is “not heading off a fiscal cliff” and does not need to “hit the panic button.” He said that the district will continue to improve efficiency, such as combining administrative positions and there is already a part-time principal at the Orange Inclusive Preschool.
Mr. Pestello said that the district is losing $791,418 in state foundation aid, which is a 21 percent reduction. The district’s primary source of revenue is real estate taxes, which make up 71 percent of Kenston’s revenue, but state foundation aid is the second biggest chunk of funding at 10 percent.
Under Gov. DeWine’s cuts, Kenston would owe the state $175,000.
Superintendent Nancy Santilli said that a significant cut in funding was not anticipated and it is challenging because it comes so close to the end of the fiscal year. As of Friday, Mrs. Santilli was not yet sure how this funding cut will affect the district this fall.
“This isn’t a two-month problem. This is a long-term problem,” she said.
Chagrin Falls Exempted Village Schools anticipated $1.68 million in foundation funding for this fiscal year, according to numbers from the Office of Budget and Management. During last week’s board of education meeting, Treasurer Ashley Brudno revealed a cut of $533,732, almost 32 percent of the district’s state funding.
“[The] model is essentially looking at the wealth of your district in terms of property value and assuming you can tax people more,” Superintendent Robert Hunt said. “The issue is that’s the whole way the funding system is already built. Our local residents are already carrying the weight of funding. We realize this is a difficult time, we realize cuts are necessary, but to use the model in the method that they did, I think, is very, very unfair.”
Dr. Hunt said that the cut affects their levy cycle and where they need to make cuts in the district to keep this cycle. “It’s kind of a snowball effect right now, and we’ve got to make a decision on what we can cut, what we should cut and then the appropriate millage to ask our community for, and that’s going to be a real balancing act, for sure.”
Solon City Schools Treasurer Tim Pickana said the district is losing 38 percent of its state funding, about $1.34 million of their anticipated $3.5 million in foundation funding. The state reductions make up about 1.86 percent of the district’s total operating expenditures.
Mr. Pickana said the district is projecting this loss in its five-year forecast, noting that the state typically does not return lost funding to Solon.
“The state has historically not supported Solon city schools, and I believe it would be irresponsible to be optimistic thinking that the state would return us back to our mere 5-percent funding level,” he said.
Acting Superintendent Fred Bolden said the district remains in communications with the governor’s office to see if the funds will be returned.
“We’re trying to push this because we understand we all need to tighten our belts over the course of what’s going on, but we already get so little from the state, so taking this much when we already get so little hurts us more than it would a district that’s getting more,” Mr. Bolden said. “We’re all about paying our appropriate share, but we feel that should be distributed a little more equitably.”
Chardon Local Schools Treasurer Deb Armbruster said her district’s foundation aid would be hit by a $719,964 cut, 13.2 percent of their original total of $5.45 million.
Chardon Superintendent Michael Hanlon said the district’s primary source of revenue is local property tax, which accounts for 64 percent of their income. Comparatively, the state foundation payment supplies 13.8 percent of Chardon’s revenue.
Dr. Hanlon said that the recent funding cut was more than the district’s three remaining state foundation payments for the fiscal year ending in 2020, which means the district will somehow have to return money to Ohio.
“They have not clarified what that means of recovery back to the state is going to be, whether they’re expecting us to write them a check, they have not clarified that,” he said. He is not yet able to reveal some of the areas in the district that will feel those budget cuts firsthand but did offer an idea.
“Schools are a people business,” Dr. Hanlon explained. “About 80 percent of expenditures in school districts are for people. And that’s typical of any school district, so that’s where those reductions are going to have to come out over the long haul.”
Cardinal Local School District’s anticipated state foundation payment of $2.45 million will be hit with a 10.9 percent reduction of $267,380, according to district Treasurer Merry Lou Knuckles.
Ms. Knuckles said there are too many unknowns to predict how adversely this will affect her district, but they may not need to make any budget cuts at this time because three district employees retired at the end of the school year. The district, she said, is not planning to replace those people but instead set aside that money for a budget reserve.
“Depending how the state makes and applies the state funding reductions, we could see reduced revenues in fiscal year 2021,” she said.
She also explained that she’s expecting to hear additional guidance sometime within the next week on whether Cardinal will have to refund money or the state will reduce payments for the next fiscal year.
Berkshire Local School District Treasurer Beth McCaffrey said the district’s state foundation payment will be $343,288 lighter than it originally would have been when she presented her five-year financial forecast to the board of education on Monday. She said that’s 7 percent less than the $4.64 million total she originally expected.
“That all needs to get absorbed in May and June,” she said. “That is going to hurt and push us into a deficit spending situation.” The forecast anticipates the district’s cash balance to decrease from the $4 million they had last year down to $171,214 by 2024.
A silver lining is the federal CARES act, which Mrs. McCaffrey said will gift Berkshire about $175,000.
“We’re really going to have to keep a close eye on this,” she told the board. “I think you’re probably going to see me giving you a forecast per month until we find out exactly what’s happening so we can react as soon as possible.”
West Geauga Local Schools will lose almost $542,000 in state foundation funding, Superintendent Richard Markwardt said, which represents 15.8 percent of the district’s state funding.
Dr. Markwardt added that the district will receive more than $79,000 in federal grant money through the CARES Act
West G receives $3.4 million, 14.4 percent of its budget, from state funding, he said, with about another 9 percent from state property tax allocations. Per pupil funding for the fiscal year 2020 was at $1,917, but because of the district’s “wealth factor,” that number was cut to the maximum $304.
“We will need to return approximately $400,000 to the state this year,” he said, adding that this will come from the West G’s cash reserve. He said the district is already looking at cost saving measures with more anticipated.
During Monday’s regular board of education meeting, district Treasurer Karen Penler explained that the district has identified an estimated $481,000 in savings with the school buildings closed as well as changes to benefits and retirement plans.
Mrs. Penler outlined two tiers of cuts and savings. Level one reductions could include implementing a hiring freeze, adjusting staffing efficiencies, negotiating contracts and reducing textbook purchases. Level two cuts and savings could include delaying capital equipment purchases, reevaluating the purchase of new school buses and reconsidering athletics for the 2020-21 school year, among others.
“We will pare costs strategically,” Dr. Markwardt said. “This is not an insignificant loss to the district. Its effects will be felt in programming adjustments and staffing.”