Treasurer warns of seasonal deficit spending; governor’s budget forecasting could reduce state aid for some districts

Pickerington Local School District Treasurer Mr. Walsh presented the district financial report for January and briefed the board on state budget changes that could affect future funding.

Key figures: Mr. Walsh told the board that general fund cash at the end of January was $23,320,000 (the lowest point in the past 12 months), and total district cash across funds was about $129,000,000, driven largely by the construction fund. He said construction spending for current projects was a little over $6,000,000 for January and noted district-wide deficit spending of $7,000,000 through January in construction-related activity.

Revenue and expenses: Mr. Walsh outlined January inflows: foundation funding from the Ohio Department of Education (about 41% of inflows for the month), income tax collections (about 33%), and health-insurance-related funding at about 12%, with other sources making up roughly 13%. He said personnel costs comprised just under 50% of the month’s $22,000,000 in all-fund expenses. He told the board that tax advances from the two counties that serve the district arrive slowly and are expected to increase in February and March, which typically flips the district’s cash flow to the positive side before summer deficit spending resumes.

State budget implications: Mr. Walsh explained aspects of the governor’s budget the administration reviewed. He said the governor’s proposal phases in the final two years of the Fair School Funding Plan and freezes base-cost components at FY22 levels; in the treasurer’s forecast the district had anticipated roughly a 6% increase in those base-cost components. He said the governor’s proposal would be detrimental to the district forecast. He also noted a new “guarantee” piece in the proposal that caps increases for guaranteed districts at 95% in the first year and 90% in the second year, although he said Pickerington is not a guaranteed district at present.

Follow up and corrections: Mr. Walsh acknowledged the board had been provided an attachment with construction figures but that an older attachment had been included in the packet; he said he would update and circulate the corrected construction attachment to board members. The board requested the corrected document be emailed to members for their records.

Context from board members: Board members discussed the budget unpredictability and asked about implications for staffing and programming. One board member suggested outreach to state officials; Mr. Walsh and others noted the house and senate will consider the proposal and that final funding will not be set until the legislative process completes.

No vote was required to receive the report; the board later approved the financial report by roll call as part of the business agenda.