CONNEAUT – A little more than a year ago, the Ohio General Assembly passed its latest biennium budget, and Gov. Mike DeWine signed the bill.
That budget changed the way Ohio’s schools were funded. In subsequent months, tax reform has further altered that process.
Fiscal Office Advisor Jackie Miranda delivered a grim outlook for how Conneaut Area City Schools will be affected by the changes during a regular board of education meeting on Wednesday, Aug. 19.
“We need to come up with something that’s going to either generate $1.4 million before July 1, 2027, or make reduction or some combination thereof,” Miranda said. “The estimate that we were provided with our advisor was that it would require a 12-mill levy in order to get us out of this situation. That’s not necessarily an option.”
“We’re going to have to consider what this looks like in July 2027,” Miranda continued. “We’re really going to need to have something in place, a reduction plan, whether it’s reduction or it’s some sort of increase in revenue. Those are the are the choices. We can’t wait to see what the state may or may not do as of July 1 in their budget.”
Miranda, CACS Treasurer Robin McKee, CACS Superintendent Lori Riley and CACS Assistant Treasurer Abbie Brockway worked as a team to prepare the five-year forecast delivered by Miranda. The group also sought input from Ashtabula County Auditor Scott Yamamoto as property revaluations will once again alter the landscape.
“(Yamamoto) shared that during the reappraisal process, Conneaut residential properties could see about a 35-percent increase with Monroe properties seeing about a 30-percent increase on average. That is pretty significant. The increase overall in residential properties in the Conneaut school district area, the increase, is $62 million. The $62 million increase in valuations is six times more than the increase was in 2020.”
Those increases in valuation, however, will not help the district.
“We’re beyond the 20-mill floor, so when the valuations increase, we’re not going to see any growth because we’re above the 20-mill floor,” Miranda said. “We’re not going to see any significant increases.”
The emergency levy that CACS collects is now included within the 20-mill floor calculations putting the district at approximately 24 mills. The district will collect on that levy through the summer of 2027.
“We’ll have to find out if that would draw us back below the 20-mill floor,” CACS BOE member Chris Brecht said.
Miranda said it would be close.
“It would be very, very tight,” Miranda said. “I think we’re at about 24.25 now, so it would be very, very tight. The more your valuations increase, the wealthier you are, and then the millages go down. It’s a process we’re really going to have to watch as we go through this.”
In the five-year forecast presented in February, Miranda estimated that CACS would begin July of 2029 with just $280,000 left in the general fund, but that has changed.
“Today, because of different changes, tax reform being a big component of that, we’re not going to quite make it until the end of 2029. Sometime in fiscal year 2029, we’re going be running out of funding,” Miranda said.
There are factors beyond the district’s control that have changed that timeline.
“One thing that we don’t have any control over is state tax reform,” Miranda said. “There’s legislative caps, there’s reduced funding that’s triggering inflated property valuations and we’ve got rising operational costs, and all of these things have just pushed up our timeline when we’re going to run out of money, just to be very frank.”
CACS BOE member Joan Norton asked if not renewing the emergency levy would open other avenues of funding.
“If it’s not renewed, residential homeowners are not going to see a decrease in their taxes because the public utilities and businesses are picking up the costs,” Miranda said. “Residential owners are not going to see a decrease in their taxes if they don’t renew the levy because it’s all on the backs of the business owners and public utilities because of these other tax reform pieces.”
Essentially, not renewing the levy means the district would lose funding. Property owners, however, should they vote the levy down when it’s up for renewal, will not see a decrease in their taxes.
“Residential people, it will have no impact on the taxes because that savings will go to businesses and public utilities,” Brecht said. “If we do submit the levy and it does get approved, then there will be no increase to anybody. It’s just the businesses and the utilities will not see their decrease. There is some advantage to us having it go through, but from an education standpoint to the consumers, voting no doesn’t help them, and they’re not going to believe us when we tell them that.”
Rising property valuations are also hurting the district.
“Because our valuations are increasing, it makes the district appear wealthier, which means we don’t need as much from the state, which means that our state funding per pupil, our base cost, is going to decrease every year unless its offset in the budget on July 1, 2027,” Miranda said.
Despite operating in a fiscally responsible manner, a number of factors beyond the district’s control have put it in a bad place financially. Beyond the legislative changes, the district must maintain staffing and appropriate wages; classified wage increases; increases from substitute and supplemental staffing; and surging health insurance costs.
“We’re trying to keep up with that,” Miranda said. “Even after the changes in staff, even with those adjustments, thoughtful conversations, common sense things, what, what was going to work best for students based on enrollments and age levels, grade levels, even with those, we’re still negative spending this year by $713,000 and $2.5 million next year in 2028.”
Should the district not make the necessary changes or find another revenue stream by July 2027, the state will eventually step in and make the cuts it feels necessary to balance the budget regardless of input from the district’s administration.
Brecht asked Miranda if, after the forecast is submitted, the district could receive data on how many districts are at each level of financial crisis.
“I’m sure that will be a hot topic through OASBO (Ohio Association of Business Officials) and BASA (Buckeye Association of School Administrators), and they’ll be pushing out that kind of information because it will be significant,” Miranda said.
Brecht noted the information is important as it helps the board of education to frame its conversations with the public.
Riley pointed out the situation was not unique to Conneaut Area City Schools.
“That’s it, that’s the point,” CACS BOE member Russ Coltman said. “Is it 30 percent, is it 50, is it 70 percent of the school districts that are being pushed into this because of the funding that says, even though you don’t pass any levy, you don’t get any more money and the taxpayers pay the same amount, which is ridiculous.”
Riley said that if the district had not been so fiscally responsible, the situation would be much worse.
“You can see where other districts in the state have already had to make drastic, drastic moves,” Brecht said. “I guess this is standing on a soapbox right now, but at what point does OASBO or BASA or any initial group you want, come back and push back, whether that’s through a class action lawsuit? We all know that the funding was deemed unconstitutional in 1997. They proposed multiple changes and proposals, but if we just keep sitting here and waiting for them to make the right decision versus you’ve got 616 school districts and several million people in unions that at some point need to push back and say, ‘Tell us how to do it’ then show us how what they’re telling us to do is going to provide improvements or results.”
Brecht discussed a mandate handed down by the state requiring an extra 30 minutes of work for teachers and a mandate of one hour of recess every day.
“If we increase our day by an hour and a half, you expect people to work a nine-and-a-half-hour day for the same pay,” Brecht said. “That’s a specific example of one unfunded mandate. You can even go back to when they gave us, what, $200,000, $220,000, to encourage us to do a resource officer. Okay, that pays for two years. Did they give us any more funding? Because we now have two resource officers, how can we go to the public and say we need to cut resource officers and safety isn’t as important?”
Brecht said it was an educational point for the people saying getting rid of 500 superintendents will save districts $27 billion and have one superintendent per county.
“I don’t know anybody that takes on more work and doesn’t get more pay,” Brecht said. “That’s not how it works in the real world. You’re not going to be able to take Lori Riley and say you now have to oversee eight districts and 7,000 employees and we’re going to pay you the same amount of money and you’re not going to have any support staff to do that. You’re not going to have any assistant superintendents.”
Brecht’s frustration over the matter flared.
“At some point, I think, we don’t just say, ‘Okay, we’ll make it work,’ and I don’t want someone coming in and telling us what we have to do, but why don’t you tell us what you think we could do other than giving us more work without more money,” Brecht said. “You’re going to cut per pupil and then give us more responsibilities. And, oh, by the way, make sure that these kids have social/emotional cares and food cares. A politician just recently said we need to have year-round (school) to offset daycare. Now you want us to babysit. Are we babysitting or are we educating? You can’t have both.”
Riley said the district is doing what it can with class sizes as class sizes are up at both Lakeshore Primary and Gateway Elementary.
“From a simple math standpoint, even if we lost 100 students in one year, and right now it’s about $8,000 per student as a real rough ballpark amount,” Brecht said. “The state’s going to take $800,000 (in funding away). One hundred kids over 13 grade levels is about eight kids per grade. You could say 100 kids, get rid of four teachers. Well, eight kids per grade, that’s two kids per classroom, one and a half kids per classroom.”
“Even if we got rid of four teachers, you took away $800,000,” Brecht continued. “That’s like $350,000 in savings because, obviously, you’ve got to get rid of your lowest-salaried teachers. You’re taking the 800 grand. Even if we cut the four teachers, we still have a $550,000 deficit that we don’t have a way to fix. And, they already admit $8,000 per pupil isn’t the total cost, but they won’t let us get any more on the property tax side. It’s like, your math don’t math. That’s the problem.”
Coltman made the point that the district is not to blame for the financial mess it could soon find itself in.
“I think the parting shot is that we’ve got [a] good team assembled,” Coltman said. We are doing good things and the problems that you’re seeing are not being created within this district. They’re being created in Columbus.”
The next step for the district is to consider what it must have versus what would be nice to have.
“That’s very hard to say because there are so many things that have been put in place through thoughtful action, not just on a whim. We need to do X, Y, and Z for the safety of our students, security of our students, promote good educational environments for our students, but we need to continue to reevaluate those all the time,” Miranda said.
