Lakewood treasurer warns House proposal could cut $14 million from district over two years; board urged to consider levy timing

Lakewood City Schools Treasurer Kent Zeman told the Board of Education on May 5 that the district's general fund is forecast to take a hit under pending state budget proposals, and that one House plan could effectively withhold about $14 million in locally approved levy revenue over two years.

"Revenues for this year on the general fund totaled just a little bit over $85,000,000 and expenditures are coming in at $88,200,000," Zeman said, describing the district's current fiscal-year numbers and the structural pressure school districts face as operating costs rise faster than property-tax driven revenues.

Zeman laid out three budget scenarios being discussed at the state level and why each matters to Lakewood: the governor's proposal (a reduction to the district's guarantee under the Fair School Funding Plan), the House proposal (flat funding plus a local cash-balance reduction mechanism), and the status quo. He said the House plan would empower a county budget commission to reduce distributions when a district's cash balance exceeds 108 days (about 30 percent), and estimated an approximately $14 million reduction in property-tax distributions across 2026'27 "— roughly $7 million in 2026 and $7 million in 2027," Zeman said.

Why it matters: Zeman said the House proposal would turn locally approved levy revenue into a tax-credit on property bills when a district holds a cash balance above the statutory threshold, reducing the money the district actually collects while still appearing on taxpayers' bills as a credit. That change, he added, would shorten the practical window for levies to generate operating revenue and make the district more likely to need another operating levy sooner.

Zeman summarized the district's revenue mix and constraints: about 60 percent of general-fund revenue comes from local property taxes and roughly 21 percent from true state formula funding (he called 27 percent of revenue "state funding" but clarified about 6 percentage points of that are property-tax reimbursements). He also reminded the board that House Bill 920 (1976) limits how much a levy can produce relative to its original passage amount, a constraint the district has worked under for decades.

Zeman showed the board a multi-year forecast in which expenditures outpace revenues and the district's cash balance declines; under current law the forecast shows the district could drop to about 18 days of true cash by fiscal year 2029. He noted district policy sets a minimum target cash balance of 90 days and that administrators would come to the board with proposals if the balance exceeded 150 days.

Board members asked for clarifications about timing and mechanics. Zeman reiterated two deadlines that matter for the district: the state biennial budget process (the final enacted budget typically must be signed by June 30) and the tax-collection timing for levies (a passed levy does not produce full collections until roughly 18 months after passage). On whether the withheld dollars would return if the cash balance later fell below the threshold, Zeman said the bill as written leaves that discretion with the local budget commission and that once removed, the dollars would not automatically be returned.

Zeman encouraged board and public advocacy. He said he had submitted written testimony to the state Senate and urged community members to contact legislators, noting district and statewide associations (OWASBO, BASA, OSBA) are actively lobbying. He warned the board that the House proposal, if enacted, would reduce local control over funds that communities have voted to provide.

What the board did: the presentation was informational and no budget action was taken at the meeting. Zeman said the board will likely discuss an operating levy in 2026 depending on state action and recommended continued advocacy and monitoring of the budget process.

Ending: Zeman said the district should know the final state outcome by the end of June and that the board and administration would return with recommendations as the state budget process concludes.