Middletown City treasurer warns tax reform and enrollment drops could cut $4.2M annually
Loading...
Summary
The district’s treasurer presented a preliminary FY27 tax budget on Jan. 12, warning property tax reform and statewide enrollment declines could shrink revenue by roughly $1.5M in 2026 and up to $4.2M annually thereafter, pushing cash balances and days of operating reserves down and prompting the board to approve the budget despite the forecasted declines.
MIDDLETOWN, Ohio — The treasurer for Middletown City Schools on Jan. 12 presented a preliminary fiscal year 2027 tax budget that projects substantial local revenue losses tied to recent property-tax changes and falling student enrollment.
“The key tax reform has significantly weakened local revenue capacity,” the treasurer said during a roughly 10–15 minute presentation, warning the district could see a preliminary $1,540,000 revenue decrease in 2026 that could grow to about $4,230,000 annually in later years. The treasurer described those figures as preliminary inputs to a fuller forecast he expects to deliver in February.
Why it matters: The district’s forecast shows declining days of cash on hand through 2029, approaching the board policy minimum of 75 days. The treasurer said that, although monthly cash balances remain positive in FY27 and the district can cover the highest monthly expenses in the short run, the longer outlook will require "systemic changes," including tightened planning and greater transparency.
Details: The presentation flagged two main drivers of reduced revenue: (1) state-level property-tax reform that effectively counts previously converted emergency or temporary levy mills toward the 20-mill floor, increasing the district’s calculated millage and reducing state reimbursement; and (2) enrollment declines statewide that lower state funding tied to student counts. The treasurer explained that the district’s conversion of emergency levies into permanent levy components now counts against the floor and that the district would need substantial property-value increases (roughly 74% in his example) over multiple appraisal cycles to restore the previous position.
Board action and reaction: Despite the somber forecast, the board moved and approved the FY27 tax budget on a roll-call vote during the organizational meeting. The treasurer said the short-run cash position allows time to respond, but he reiterated the need for early planning to avoid deficits that the forecast indicates could begin sooner than previously expected.
What’s next: The treasurer plans to produce a fuller forecast in February and present it at the board’s next meeting. That forecast will update the preliminary revenue impacts and offer detail on options the district could pursue to stabilize finances.
