CHUH Schools Could Receive $7 Million Less in 2012 Than in 2011

The Cleveland Heights-University Heights School District likely will get about $7 million less in local, state and federal money in fiscal year 2012 than in the previous one.

Scott Gainer, chief financial officer for the district, presented the five-year financial forecast to the school board at its special meeting Tuesday night.

The forecast is used as a tool to estimate the district's finances and to plan. It's also used to decide when the district needs to ask residents for more money, Gainer said.

"The district and the board have done a good job at being fiscally responsible," Gainer said. 

But according to a written statement to the board about the financial health of the schools, "The current forecast demonstrates a very clear need for an operating levy in 2011."

“There’s certainly still a significant amount of uncertainty at the state level, at the local level, so we are going to give you all the information that we know at this point,” Gainer said before he went into the details of the document. “And obviously this changes by the week, by the day actually.”

In years past, the amount of money a district would receive was easier to determine than what it would spend. Now, it’s the exact opposite as funding sources are so unpredictable.

Ohio law requires that public school districts approve the five-year budget forecast by Oct. 31 of each fiscal year, and any amendments have to be approved by the Board of Education by May 31.

Local

The district’s primary money source comes from property taxes. Because of mortgage foreclosures and tax delinquencies, the collection rate is at about 91 percent in Cleveland Heights and University Heights, Gainer said.

Local revenue dropped by about $1 million from 2010 to 2011, and is predicted to decrease again by $2 million in fiscal year 2012. From 2009 to 2012, local revenue is expected to decline by $4.5 million.

Interest income from investments has also taken a hit, dropping from $1.6 million in 2008 to just $200,000 in 2011 and estimated to remain the same during the next five years. Because of the restrictions on what a school can invest in and the volatile market, the district has struggled to find safe investments.

“We’re scrambling to find things to invest in that would give us some sort of funding,” Gainer said.

State

The , or taxes on office equipment, will also slash some state funding to the district.

CHUH received about $3.75 million in TPP in 2011, and is expecting to get $1.7 million in 2012 and nothing by 2013.

Overall, the district predicts it will still get about $17 million from the state, and will not be affected as much as other districts from the cuts in Gov. John Kasich’s proposed budget.

Federal revenues are estimated to remain about the same. The district's total revenue is expected to drop from $98.9 million in 2011 to $91.5 million in 2012.

Expenditures

Teacher salaries make up the largest chunk of district spending. In the past, that number has increased by sometimes almost $2 million in one year, but will increase by about $400,000 from 2011 to 2012.

About 50 teachers opted to participate in the CHUH School District’s , which is estimated to save the district $1.2 million, and employees agreed to , Gainer said.

The total expenditures are supposed to increase from about $102 million to $104 million, according to the forecast document.

Gainer said they were able to stretch the 2007 operating levy over a four-year period instead of three, but the district can’t wait any longer.

A formal levy recommendation will be presented to the board after a lay finance committee reviews the forecast, according to the statement.

The CHUH School Board also discussed alternative revenue sources to ease the burden on taxpayers. Details from that conversation will appear in future articles.