CMSD finance chief warns of multi‑year shortfalls; board to vote on forecast Oct. 14

Chief Financial Officer Kevin Stockdale told the Cleveland Municipal School District Board of Education on Sept. 23 that the district faces continuing multi‑year budget shortfalls unless it maintains and expands cost‑cutting measures. Stockdale said changes enacted this year in the state operating budget (House Bill 96) altered the forecasting timeline and shortened the required forecast window; the district is presenting a four‑year forecast this fall and will vote on it at the Oct. 14 work session to meet the state’s Oct. 15 deadline. Stockdale said the district’s revenue shortfalls stem from two main sources: lower property tax collection rates for tax year 2024 and a pause in implementation of the state’s Fair School Funding Plan, which left Cleveland schools about $16 million a year below earlier expectations. “Last year we saw actual collections about $9,000,000 lower than expected,” Stockdale said, and he added that state changes have produced material uncertainty for future years. The presentation showed that the district’s largest expense category — salaries and benefits — comprises about 79 percent of spending and that employee benefits (primarily health insurance) have been difficult to project; Stockdale said health‑care cost growth averaged about 7.5 percent in recent projections. He added the district has negotiated new health‑insurance providers and worked with labor partners to reduce exposure, but benefits costs remain a pressure point. Stockdale presented a baseline reduction plan that would require $5 million in cuts this fiscal year and $35 million in the following year, describing that package as a “minimum” to remain in compliance with state fiscal expectations. Dr. Kirthi Sridhar and other board members asked for clarification about the difference between a year‑end deficit and cash balance; Stockdale explained that a district can run an operating deficit while still holding cash reserves, which ultimately would be drawn down if deficits continue. Board Chair and CEO remarks credited recent internal reductions and the passage of a local levy with narrowing projected deficits but emphasized that more work is necessary to reach long‑term sustainability. The presentation compared Cleveland to peer districts and showed that many large urban districts face similar timing risks for cash exhaustion if they do not enact further reductions. No formal vote on the forecast was taken at the Sept. 23 business meeting; the board will vote on the forecast at its Oct. 14 work session. The board previously approved a consent agenda and adopted 16 resolutions at the Sept. 23 meeting; the consent motion passed by roll call with nine votes in favor. The district posted the monthly financial report and the slide materials used in the presentation for public review, Stockdale said, and told the board the administration will continue to monitor property‑tax collections and federal grant prospects closely. Stockdale said the district’s financial position has improved compared with earlier forecasts but warned the improvements are the result of internal cuts and cannot fully offset external funding pressures. “We have made the reductions that have made this possible,” he said, while noting the need for continued work to avoid larger deficits in out years. Board members asked for continued updates and for staff to pursue additional savings and advocacy at the state level to restore expected funding levels.