Board warned state budget changes could tighten district cash as real-estate collections dip

The Brecksville-Broadview Heights Board of Education on April 16 heard warnings that recent actions in the Ohio legislature and weaker-than-expected local property-tax collections could tighten the district's cash position.

Ellen, the board's OSBA legislative liaison, told the board the Ohio House voted to discontinue the Fair School Funding Plan and that the House budget proposal would require school districts to refund property-tax revenue if a district's carryover exceeds roughly 30% of the previous fiscal year's general-fund expenditures. Ellen said the Senate will now negotiate the final budget.

The district's treasurer, Craig, told trustees the district is about $304,000 below its projected real-estate tax receipts for the year. Craig said collection rates that have generally run about 97%–98% in the district may have dropped to roughly the mid-90s this year, and staff are checking with county collection offices.

"We're about 304 hundred thousand dollars less than what we had projected to collect in real estate revenue," Craig said during the presentation. He showed a cash-balance chart that starts the year near $26.8 million and warned that if the state's proposed carryover threshold becomes law it would lower the district's starting cash and could reduce the number of days of cash on hand in some months.

Board members and district leaders said that forcing districts to spend down carryover or to refund money to taxpayers could shorten the effective life of operating levies and push districts back onto the ballot more frequently. Board members urged the public to watch the Senate process and contact state legislators.

The board also discussed that the district earned substantial interest and investment income in recent years (Craig said the district earned about $1.4 million in interest in the prior year) and that those earnings help lengthen levy cycles. Several trustees said state proposals that would lower allowable carryover would reduce the district's ability to invest and earn that income.

Why this matters: The combination of a legislative change that would penalize higher carryover and a drop in real-estate tax collections could create cash-flow pressure in January (the district's typical low point) and affect decisions about the timing and size of future levy requests.

What's next: Officials said they will continue analytic work with county offices, publish the board's five-year forecast at the next meeting and monitor the Senate's budget negotiations. Trustees asked staff to return with updated projection scenarios if county collection data confirm a durable decline.