Westerville superintendent warns cash-reserve limit in budget amendment would force deep cuts

Angie Hamburg, superintendent of the Westerville City School District, told the Ohio House Finance Committee on April 8 that an amendment under consideration in the state operating budget would force her district to make deep, immediate cuts and likely return to the ballot annually.

Hamburg said the proposed change — language discussed in committee that would permit the auditor to suspend property-tax collections for any district with a cash balance greater than 25% — would remove the district’s primary cushion for recurring operations and long-term contracts.

The superintendent said the district serves nearly 15,000 students, employs nearly 2,000 people and uses a positive unreserved cash balance to smooth operations and sign multi-year contracts. “The only band aid we have right now is our cash balance, and like many districts, losing it abruptly would be catastrophic for us,” Hamburg said.

Hamburg told the committee Westerville’s current cash balance reflects several factors, including use of one-time federal ESSER funds to keep staff in place during and after the pandemic, a failed levy this November and strategic moves to shift reserves into the operating fund. She said the district is deficit spending “year over year by over $20,000,000 throughout the life of our forecast” and that the district used cash this school year to cover a roughly $4,000,000 reduction in state aid. She also said the district received roughly $2,700,000 in increased property taxes after recent reappraisals — a net loss once the state reduction is counted.

Hamburg described the district’s cashflow challenge: “We spend about $638,000 a day in our district,” and salary and benefits account for about 82% of district spending, making cash reserves essential to meet payroll and other recurring costs. She said the district had banked $25,000,000 in expedited local partnership credits with the Ohio Facilities Construction Commission, but that those credits were not yet available for use and that general-operating cash remains the primary means to cover recurring expenses and building needs.

Committee members questioned Hamburg about how much the district’s cash balance drops during semiannual tax payment cycles and how reserves affect bond ratings; Hamburg said Westerville carries a AAA rating from Moody’s and that cash and deficits are material factors in rating reviews. She also described rising special-education costs, adding eight specialized elementary classrooms this year and pointing to higher-cost out-of-district placements that can exceed six figures, plus additional transportation costs.

Hamburg said the district’s current fiscal plan — after staff reductions and other savings — keeps the five-year forecast in the black through 2029, but that the amendment’s 25% threshold would require “major cuts to programming unless we continue to successfully ask for small regular levies.”

Committee discussion at the hearing did not adopt a policy change specific to Westerville; Hamburg’s testimony was part of the committee’s broader budget hearings and question-and-answer process.

The committee recessed and later returned to consider and accept an omnibus amendment to the state operating bill and to vote on amended substitute House Bill 96.