“The district continues to carefully manage its finances while planning for changes in how school funding works in Ohio,” said Justin Blevins, treasurer/CFO for Kettering City Schools, reading a statement he said was shared among district treasurers in Ohio as schools face funding challenges.
“Recent property tax reform legislation passed by the Ohio General Assembly, including House Bills 186, 335, 129, and 309, is gradually changing how much revenue school districts receive from property taxes,” Blevins said.
These laws slow the growth of property tax collections when property values rise in order to create more predictability for taxpayers, he said.
Each of these bills were signed by Gov. Mike DeWine in December and are scheduled to go into effect on March 20. The bills use different mechanisms to try to limit the growth of tax millage to the rate of inflation.
“As a result, school districts across the state, including ours, should expect to receive less revenue over time than what had previously been forecasted under older funding rules,” Blevins said.
As property tax reform is still ongoing, Blevins said the district is continuing to monitor the changes, as well as update and adjust its long-term financial planning.
Kettering schools’ forecast
The Kettering City School District is trending toward a revenue shortfall with its expenditures growing faster than revenue, according to its five-year financial forecast.
A revenue increase of 14.44% is needed to balance the budget in fiscal year 2030, or a more than $26 million reduction in expenditures, according to the district.
The largest contributor to the projected revenue trend is the change in state funding, according to the district, which added the expenditure most impacting the changing trend is salaries.
Credit: Bryant Billing
Credit: Bryant Billing
Expenses are projected to be greater than inflation over the next five years, according to Kettering schools’ financial forecast. Inflation is projected to be 2.26%, revenue is projected to decline by 1.32%, and expenses are projected to increase by 4.37%.
While the Kettering City School District is projected to start outspending its revenue by fiscal year 2028, the district still has a positive cash balance through the end of the financial forecast. That cash balance will decline, though, from $44.3 million in the current fiscal year to $18.9 million in fiscal year 2029.
For the current fiscal year 2026, Kettering schools’ revenue is $134.1 million and expenses are $129 million. Forecasted budgets include:
- For fiscal year 2027, revenue is projected to be $133 million and expenses are projected to be $132 million.
- For fiscal year 2028, revenue is projected to be $129.4 million and expenses are projected to be $137.9 million. Expenses will exceed revenue by about $8.5 million.
- For fiscal year 2029, revenue is projected to be $126.4 million and expenses are projected to be $144.6 million. Expenses will exceed revenue by about $18.2 million.
At Kettering schools, salaries represent 57.09% of total expenditures. Salary costs are projected to grow at an annual average rate of 4.13%, or $3.1 million, through fiscal year 2030.
The district is looking at “right-sizing” or reducing its staffing and other ways to save money, according to Blevins.
The funds from the operating levy passed in 2022 are expected to last through 2028, Blevins said.
If the state and other funding models stay the same through 2028, then that is when the board could look at how to address the shortfall projected for upcoming fiscal years, he said.
Miamisburg schools’ forecast
The Miamisburg City School District is projected to lose $13.5 million of revenue over the next four fiscal years due to the Ohio General Assembly’s property tax reforms, according to Greg Wells, treasurer at Miamisburg schools.
“When I first interviewed, I looked up the forecast at that time — the May forecast that had just been delivered — and the board when I interviewed was very forthright. We were facing some headwinds. We had some deficit spending in our forecast and that they were committed to addressing that,” said Wells, who joined the district in July.
That headwind has turned into a hurricane, he said.
Miamisburg City Schools expects to spend more than it brings in during the current fiscal year, according to its latest financial forecast. The district projects $66.1 million in revenue and $71.5 million in expenses — a gap of roughly $5.4 million.
Miamisburg schools will have a positive cash balance until about fiscal year 2029. For fiscal year 2026, the district’s cash balance will end at $22.9 million, but by the end of fiscal year 2029, the cash balance is projected to be negative $3.6 million.
The district is cutting costs where it can, such as through reducing staff through attrition, which means not filling positions once an employee has left. The district has had 13 positions that they have not filled in order to save money, according to Wells.
Other cost-savings are coming through retirements, decreased enrollment, decreased discretionary fund spending, and other avenues, but board members at a recent meeting discussed the need for a longer discussion on how to address the upcoming deficit spending.
“So at the end of fiscal year (2027)...that’s when we really need to have a corrective action plan being implemented or on the verge of being implemented in order to make sure we have sufficient operating capital,” Wells said. Fiscal year 2027 runs from July 2026 to the end of June 2027.
“We’ve taken steps to try to reduce the impact of those...state legislation cuts, but we still got a lot of work to do,” Wells said. “We’re having some tough conversations internally.”
Dayton, Oakwood may consider future levies
Kettering and Miamisburg are not alone as other districts are also facing financial challenges ahead.
Dayton Public Schools plans to seek a levy in November as the district is expected to be about $9 million over budget next school year, according to DPS Superintendent David Lawrence.
Potential implications for the district include several different scenarios, Lawrence said, including the district carrying over debt into the next year or potential layoffs.
The board earlier this year discussed different levy options, such as property taxes at different millage levels or even the possibility of an income tax.
Issues cited as the basis for the need included volatility at the state level in school financing, rising costs, and more funds needed to complete academic transformation.
Credit: Bryant Billing
Credit: Bryant Billing
At the Oakwood City School District, its financial forecast is projecting deficit spending starting in fiscal year 2027, prompting district leaders to advise its school board that they may need to seek a new operating levy next year to keep up with costs.
The district will still have a positive cash balance to carry operations through the next few years, but the financial forecast shows those cash reserves declining through fiscal year 2029 so far, excluding proposed renewal/replacement and new levies.
Credit: Bryant Billing
Credit: Bryant Billing
Eileen McClory contributed to this story.
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