Senate President Rob McColley, R-Napoleon, said his chamber met with Ohio superintendents who “all pretty much uniformly felt (30%) was too low of a number because it didn’t allow for much of the unanticipated, unexpected expenses that a school district might see.”
Under the Senate’s plan, 26 out of 57 districts in Butler, Clark, Greene, Miami, Montgomery and Warren counties could potentially be required to give money back to taxpayers. The total amount across all those districts is about $166 million, according to an analysis by this news outlet.
Multiple local school superintendents and treasurers testified against the provision proposed in the Ohio House capping a school district’s cash carryover balance — the remaining money that schools have at the end of the school year — at about 30%. The state average is about 45%.
Districts that have money set aside for new capital projects, such as building new schools, would not have that count against them, unless those capital project funds are part of the carryover for more than three years.
Six of the seven Greene County school districts — Beavercreek, Bellbrook, Fairborn, Cedar Cliff, Xenia and Yellow Springs — had more than 50% of their annual budgets to carry into the next year. But other counties would not see as much change. For example, none of the Warren County districts currently meet the mark, according to an analysis by this newspaper.
Ohio House Speaker Matt Huffman, R-Lima, told reporters Tuesday that he sees room for negotiation with the Senate. He said the Senate’s 50% plan would only target $1.7 billion currently held in reserves, while the House’s plan targets $4.2 billion.
“So, it’s not as big of a tax cut,” Huffman said. “...Maybe 50% is a better a number, maybe 40% is a better number.”
But others said the measure to cap carryover balances is not going to help.
“Property tax relief should never be accomplished on the backs of Ohio’s public school children, and the Ohio Education Association maintains our very serious concerns about the Ohio Senate’s insistence on moving forward with plans for short-sighted carryover caps and other hand-tying measures that will leave many school districts’ finances in shambles and force cuts to the staff and services our students rely on to get the great public education they deserve,” said Scott DiMauro, Ohio Education Association President, which represents teachers’ unions across Ohio.
Lawmakers have proposed the change to address property tax reforms. Increasing home values have led to higher property taxes, something that lawmakers have said they want to address.
“Certainly raising the reserve cap is progress, but it still does not address the real issue, which is: This is not real property tax reform,” said House Minority Leader Allison Russo, D-Upper Arlington.
Ohio’s public schools are funded in part by state funds and in part by local property taxes, depending on how wealthy the local district is determined to be by the state.
Currently, Ohio schools are not limited in how much money they carry over from year to year, and school district officials say keeping more cash helps them ask voters for tax levies less often and stay more financially secure.
Local schools say limiting their ability to carry over reserves could hinder finances.
“Our position is that this should be a local decision,” said Tony Thomas, Northmont superintendent. “The local boards of education and the citizens of the school districts have gone to the ballot, and the people of the district have elected to pass or reject the levy amounts. The state should not involve itself in the matter. A democratic process took place, and the decision should stand.”
As of the estimates from November, Northmont’s cash balance was about 43%, but the district recently passed a $3.5 million (3.44-mill), 10-year property tax levy. Typically, after a school passes a new school levy, the cash carryover goes up after it starts being collected.
Springfield City Schools has a higher-than-average cash carryover percentage, with 66.6% as of the last school year, according to an analysis from the Legislative Service Commission.
“The updated limit allowing up to 50% carryover of expenses will not present a problem for the Springfield City School District,” said district spokeswoman Jenna Leinasars. “The District has been proactively monitoring expenditures and anticipated that some form of cap might be introduced in the biennium budget. Our financial planning practices are designed to remain in compliance with state and federal guidelines, and the District is confident in its ability to manage within the revised threshold.”
