Tiffin Schools treasurer concerned about state budget

TIFFIN — Tiffin City Schools Treasurer Anne Spence gave the board of education the annual five-year financial forecast this week. She began her presentation by describing the forecast as "somewhat like a painting of the future based on a snapshot of today." Operating revenue "House Bill 33 or the Fair School Funding Plan helped Tiffin City Schools in fiscal year 24 because it put us on the formula," Spence said. "Additionally, the district hit the 20-mill floor for class 1 property taxes during the county's reappraisal in 2023." According to the Ohio Department of Taxation, the 20-mill floor means that "the application of tax reduction factors cannot cause a school district's effective current expense millage rate" to fall below 20 mills. The district, however, lost some funding due to a decrease in enrollment. According to Spence, the district's revenue has been "pretty stable" and has a positive cash balance projected through the end of 2028." The district's total revenue is estimated to grow by 1.3% annually over the next 5 years while expenses are estimated to grow by 3.79% each year. This is why the forecast indicates deficit spending. "Consecutive years of deficit spending will trigger the state to mandate the district to develop a financial recovery plan. We don't want to (be in this situation)." The general fund's estimated revenue for fiscal year 2025 is $33,879,701. 49.2% of that revenue comes from local sources like real estate taxes. 50.8% comes from state sources like the state foundation. Expenses Estimated operating expenses for fiscal year 2025 are $34,491,793. The biggest expenses are wages at 54.6%, services at 20.6% and benefits at 19.5%. Solutions to deficit spending To prevent deficit spending, the district needs to look at budget cuts, new revenues or a combination of both long term. If the district decides on a property tax levy, it needs to be an emergency levy to not lift the district off the 20-mill floor. If the district decides on an earned income tax levy, it must be passed in 2025 to allow the extended collection cycle to help the district's fiscal status. An earned income tax levy would have to be between .5-.75% to fund the district through fiscal year 2029. Legislative concerns "The governor's budget calls for $103 million less for public schools and $448 million more for vouchers," Spence shared. "Causing additional concern are 14 proposed laws to impact local property taxes which could reduce local property taxes which could reduce local funding for public schools." According to her, House Bill 96, the state budget, is among the "most egregious and the most serious concern to all public school districts," as it would: Eliminate the Fair School Funding Plan Limit school district carryover cash balances to 30% of prior fiscal year expenditures Empower county budget commissions to suspend voter-approved levies and disregard the 20-mill floor, which Spence said would be very serious for the district, as it is at the 20-mill floor for class 1 property. Property tax implications of HB 96 would be "devastating" to public school districts "The senate has five pending pieces of legislation regarding property tax," she continued. "All of which could impact funding." The five-year forecast Spence presented Monday is based on current state funding and property taxes because the state budget has not been finalized. Any changes based on state funding and property taxes will be accounted for in the November forecast. In other news The board of education approved the following: 8.1 - Administrative contracts for Laura Bryant, Michelle Wise and Molly Armstrong 8.2 - Collective bargaining agreement 8.3 - Five-year forecast and assumptions 8.4 - HMH Into Math & Waggle curriculum 8.5 - Minutemen HR Management Services 8.6 - NCAT service agreement 2025-2026 8.7 - North Central Ohio Educational Service Center educational service agreement 8.8 - North Central Ohio Education Service Center county service agreement estimated data 2025-2026 8.9 Resilience Therapy service contract agreement 8.10 - Special Education model policies and procedures 8.11 - Adoption of policy manual 8.12 - Account creation for 035 8.13 Fund to fund transfer of $75,000 from the 001 to the 006 (Food Services), $700,000 from the 001 to 035 and $49,554 from the 001 to 002-9013 (HB 264) 8.14 Transfer of funds from STAR Ohio account in the amount of six million dollars to the district's Huntington Investment account with a maturity schedule The next meeting is scheduled for 6:30 p.m. on Monday, June 23, at the Tiffin Middle School, 103 Shepherd Dr., Tiffin.