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CMSD chief financial officer outlines budget risks as federal emergency funds end; district cites recent credit rating upgrades
Summary
The Cleveland Municipal School District’s finance team told the Board of Education that one‑time federal pandemic relief funds have ended, state and federal budget proposals remain uncertain, and the district will pursue further reductions while protecting key investments.
Cleveland Municipal School District officials told the Board of Education that the district will have to continue careful budget management as large federal pandemic relief funds expire and state and federal budget proposals remain uncertain.
CFO Kevin Stockdale reviewed the district’s five‑year forecast, upcoming appropriation adjustments and the 2025–26 operating budget proposals. Stockdale told the board the federal ARP ESSER program funds are gone: “This will be the first fiscal year since ’20 that we don't have any ARP ESSER funds,” he said, noting the roughly $465 million federal grant program ended and earlier year carryovers have been exhausted.
Why it matters: The loss of one‑time federal funds narrows the district’s flexibility. Stockdale said the district budget for fiscal 2026 was prepared on current‑year grant receipts and that final grant awards will be confirmed before the June 24 business meeting.
Key budget points: Stockdale reviewed the state budget process (governor, House and Senate versions) and legislative priorities the district is tracking, including maintaining the Fair School Funding Plan and updating cost inputs. He explained CMSD remains a “guarantee district” under Ohio funding rules because enrollment has declined and the state has not increased base funding; in the governor’s budget guarantees would have been reduced 5% but the House and Senate versions fully fund guarantees.
Credit and financial stewardship: CEO Dr. Morgan and Stockdale highlighted recent credit‑rating activity. Morgan said the district has received upgrades from S&P and Moody’s and a recent review from Fitch, and that district diligence and five‑year forecasting contributed to an upgrade from A‑ to A on at least one review, a development the district credited to “continued due diligence around our finance and our great stewardship.”
Cost‑saving measures and outlook: Stockdale listed prior deficit‑reduction work, hiring freezes and reductions in non‑school budgets. He said the district will begin earlier and deeper budget planning for next year and pursue a staffing analysis for central office. He previewed restrictions on contracting and central‑office food purchases and said the district will prioritize guardrails such as safety and student badging investments.
Board questions: Board members asked whether guarantees and direct certification proposals in the Senate version would benefit CMSD; Stockdale said direct certification would better count students in poverty and that the Senate language preserves guarantees. Board members also asked about carryover/cash balances; Stockdale reported carryover levels are within typical ranges and said the different budget versions would not materially change the district’s carryover assumptions.
Actions noted: Stockdale said the district completed a successful bond sale to fund the building program approved by voters and that routine appropriation adjustments and resolutions authorizing fiscal operations would be presented for board action at the June 24 business meeting.
Ending: The board received the financial briefing as an informational item; specific budget resolutions were listed for discussion and adoption at the upcoming business meeting.
