Westerville City School District (WCSD) Treasurer/CFO Nicole Marshall recently informed Board of Education members that her financial projections in November — where the district delayed entering deficit spending for at least one more fiscal year — have remained steady.
Marshall shared the news with Board members as part of her annual Five Year Financial Forecast presentation, which occurred during the Board’s most recent regular meeting on May 22, 2023.
She noted there are several variables the District will be watching closely that could impact the district’s general operating budget:
Marshall recently presented testimony before the Ohio Senate Education Committee on House Bill 33, the state’s budget bill for fiscal years 2024 and 2025. She focused on proposals to expand eligibility for the state’s EdChoice scholarship program and continue implementation of the Fair School Funding Plan. Instead of diverting public funds to private schools, Marshall said in her address that the legislature should fully fund its public schools and continue with the Fair School Funding Plan with its updated inputs for FY2022. She said the district continues to be underfunded as the funding formula includes FY 2018 data. The new state budget is expected to be approved by lawmakers and signed by the Gov. Mike DeWine no later than June 30.
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Potential legislation, such as H.B. 1, which could dramatically reduce the district’s revenue. H.B. 1 would enact sweeping changes to property taxation and income tax rates could have a significant negative impact on traditional public schools and local governments, according to a statement by the Ohio Association of School Business Officials.
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Property values and property tax collections. With Franklin County in the midst of a reappraisal year, property values are estimated to go up by 30% to 40%. Marshall has projected a 22% increase in property values. But she noted that it doesn’t equate to additional taxes for the school district because of H.B. 920, which freezes a school district’s income on voted mills.
So as property rates increase, the auditor cuts the school voted tax rates so schools do not receive more money in subsequent years than the first year of a levy.
In spring 2022, projections indicated that WCSD’s expenditures would begin to exceed revenue in FY23. With the strategic use of federal pandemic relief dollars, combined with a one-time influx of revenue from property tax settlements, the district was able to delay entering deficit spending until FY24, according to the November 2022 forecast. This enabled the district to continue current programs for students while facing significant cuts to state funding during the pandemic.
While the district has seen a slight increase in revenue because of investments and interest rates, Marshall said her financial projections in May are consistent with the November forecast. The district is slated to have a positive unreserved fund balance for each of its five years, with a 29-day unreserved cash balance projected in FY27.
School districts must file their five-year financial forecasts with the State of Ohio by November 30 and May 31 of each fiscal year. These forecasts rely heavily upon past fiscal trends and future assumptions, which are subject to change in the future. The updated Five-Year Forecast and all other Board action items are available online through the district’s web site at www.wcsoh.org. Visitors can obtain the information by visiting the Treasurer/Fiscal Services page under “Our Departments” or by navigating to BoardDocs via the Board of Education page. Board meetings and presentations also are available to view at the district’s YouTube page at www.youtube.com/WCSDOhio.