Garfield Heights says budget will be in surplus only if renewal levy passes as state bills threaten local funding

Garfield Heights City Schools will run a modest surplus in fiscal 2026 only if voters approve a renewal levy on Nov. 4, district staff told the Board of Education at a special work session Tuesday.

"Our school district will be running a surplus budget if and only if we, pass this renewal levy," said Mr. Oakley, district staff member, as he summarized the board's abbreviated forecast. Oakley said the district projects general fund revenue of $46,200,000 and expenditures of $46,100,000, producing a projected gain of $162,915 "assuming Issue 48 passes 50 plus 1 on November 4."

The presentation framed the district’s fiscal picture around enrollment declines, rising personnel costs and a set of pending state bills that could reduce or reshape local tax revenue. "We are essentially not increasing expenditures year over year in this forecast," Oakley said, but added that state-level changes have made revenue the more uncertain variable.

Why it matters: Garfield Heights has reduced staffing and deferred maintenance to manage a multi‑million dollar shortfall in previous years, but those steps provide only temporary relief. Without the renewal levy, the district would see a steep drop in property-tax revenue, cutting its ability to maintain staffing and operations.

Key details from the forecast: 73% of general fund spending is personnel costs; purchased services account for about 19%; utilities and supplies were each shown near 7% of the general fund. Oakley listed several line items: out‑of‑district special-education tuition at about $2,750,000; utilities and communications $1,500,000; health and pupil services $1,200,000; out‑of‑district transportation $500,000; substitute costs budgeted at roughly $1,000,000; contractors about $800,000; and legal/negotiation costs projected at $659,000.

Oakley said the district has taken steps to reduce costs, including a hiring freeze for nonessential classified positions, eight central-office reductions, attrition of about 50 certified positions over 18 months and targeted contract reviews to eliminate unnecessary services (one identified savings was roughly $80,000 annually from terminating legacy POTS phone lines). The district has also deferred some major maintenance and extended bus-replacement cycles to conserve cash.

Legislative risks: Oakley and board members discussed multiple pending Ohio bills and recent actions that could reduce district revenue or limit local control. He said House Bill 96 gave a one-time extension for the district’s forecast deadline but also includes funding changes; other measures discussed by staff included House Bill 129 and House Bill 335 (county budget commission authority), and proposals to eliminate or reclassify emergency levies so they no longer count as renewals. Oakley warned that some proposals would require placing an "additional" levy on the ballot rather than a renewal, which can increase the effective tax paid by residents because rollback and homestead credits would not apply for levies enacted after certain dates.

On the renewal levy specifically, Oakley said a full replacement of emergency levies under the new statutory framework could require roughly 16.08 mills and still collect less than current totals: "it would only collect $8,900,000 when we're currently collecting $10.2 [million]." He added that to collect the same dollar amount under the new rules would appear on the ballot as an "additional tax" of about 6.98 mills and would reduce revenue by about $542,000 compared with current collections.

Enrollment and liquidity: The district has seen a large enrollment drop in recent years, with the presentation noting a roughly 275-student loss from 2024 to 2025 and a projected loss of about 84 students for the latest year. Oakley said the district can make payroll through the current fiscal year but cautioned that fiscal 2028 presents larger risks: "We can make payroll through this fiscal year. Fiscal year 2027 is going to be a one payroll cycle. And then obviously by 2028 we are in bigger issues than making payroll."

Board action and next steps: The board adopted the forecast at the meeting. Oakley recommended a multi-year capital plan and a cash-balance policy to defend appropriations before the County Budget Commission if state changes force local reviews. He also urged continued advocacy at the state level and noted the board would include the forecast in materials voters see before the levy election.

Votes and formal actions taken: At the meeting the board voted to adopt the meeting agenda, adopted the board forecast as presented, and later entered executive session for collective-bargaining and litigation strategy; minutes and formal motions were recorded by roll call. The board recorded unanimous roll-call "yes" votes from Missus Daniels, Miss Thomas, Miss Cox, Miss Morrison and Doctor King for the forecast adoption.

The board will present levy materials to the public ahead of the Nov. 4 election and staff said they will return with a capital plan and cash-balance policy to support any required hearings or certifications.