Cincinnati schools warn state budget changes could cut millions; district weighs levy and tax options

Cincinnati Public Schools’ finance leaders told the Board of Education on Feb. 24 that proposed changes to Ohio’s school-funding formula and other elements of the governor’s biennial budget could sharply reduce the district’s state aid and require additional local revenue or program adjustments.

Treasurer-designate Michael Guston and outgoing Treasurer Jennifer Wagner walked the board through formula mechanics, examples of cost mismatches and a set of local planning options that include renewing or revising an upcoming property-tax levy, pursuing a permanent improvement (PI) levy, considering an income-tax levy, or borrowing against future PI revenues to finance immediate repairs.

District simulation presented at the meeting estimated roughly $10.1 million in lost state aid in the next fiscal year and an additional roughly $5 million in the second half of the biennium under the proposal the treasurer’s office reviewed. The analysis also showed the district’s state share of funding could fall to about 25% at the end of the biennium from current levels near the mid-30s, sharply increasing the local share the district must raise through property tax or other local revenue.

The presenters explained three main drivers: the state’s base cost factors remain indexed to 2022 levels while inputs such as property valuations and income have been updated; a proposed change to how economically disadvantaged students are counted (direct certification) could change the district’s disadvantaged-pupil weight; and rollbacks or phase-outs of some guarantee protections could reduce supplemental aid for districts with enrollment impacts. The treasurer’s office illustrated how a classroom-teacher cost fully funded at the state formula would be $96,000 (salary/benefits) while the district’s actual average cost is about $112,000 — a $16,000 per-teacher gap that, at current funding ratios, translates to a substantial local funding shortfall.

Levy and revenue options outlined to the board included: - Timelines and deadlines for an autumn property-tax levy: board resolution deadlines were listed as July 14 (first resolution) and Aug. 4 (second resolution), with county certification and final filing deadlines noted. The district has a $48 million operations levy scheduled for renewal in November; presenters noted the same dollar amount buys less than it did a decade ago due to inflation (staff used an example: a $48 million levy today has purchasing power similar to roughly $64 million in earlier years). - Permanent improvement strategy: staff and bond counsel discussed staging a smaller continuous PI levy and borrowing against those future revenues to tackle an estimated $200 million-plus facility repair program over time. - Income-tax option: staff noted an example where a 0.5% city income tax could generate roughly $64 million per year and a 1% rate roughly $129 million; a narrower earned-income–only levy (wage tax rather than taxes on investment income) would produce smaller totals (examples: ~ $47M for 0.5%, ~ $95M for 1%). Presenters flagged legal and political differences among options.

Presenters also described other advocacy and structural ideas discussed with urban peers in Columbus: updating the base cost factor to current-year cost inputs, considering statewide health-insurance pools to constrain district costs, and reevaluating transportation-penalty calculations that currently impose districtwide penalties rather than per-student per-day charges.

Board members pressed for clear, public-facing messaging — including plain-language examples that help voters and residents understand why levy amounts must change as costs rise. Several board members emphasized the district’s urban context, arguing a state formula calibrated to statewide averages underpays large urban districts with higher operating costs.

Student-based budgeting: district leaders said they are re-examining a model that would allocate base revenue to schools according to enrolled students and categorical weights (special education, ELL, gifted, poverty, career-tech), illustrated with pilot modeling of four elementary schools and planned work on four high schools. Staff warned mobility and midyear enrollment shifts create complexity: student-based budgeting typically requires periodic counts and mechanisms to address schools that gain or lose students midyear without disrupting instruction or creating immediate staff churn.

Next steps announced to the board: continued public engagement and virtual budget sessions, more detailed levy design work by the finance committee and advisers, and updated simulations as the state budget process evolves. Administrators requested board direction on the timing and size of any levy proposal; board leadership asked for a schedule so members know when the board will decide on ballot language.

The treasurer’s office presentation and the board discussion underline the district’s planning focus for the months ahead as the General Assembly considers the biennial budget.