Hamilton City Schools forecast shows roughly $4.8 million general‑fund shortfall; treasurer warns of negative cash if no action

Treasurer Frazier told the Hamilton City School Board on Feb. 10 that the district’s February forecast shows a projected general‑fund revenue total of about $117.5 million against roughly $122.5 million in expenditures, ‘‘which means we're looking at about a $4,800,000 deficit spent,’’ he said. The presentation covers only the general fund and does not include the district’s deficit‑reduction plan, which Frazier said will be reflected in the May update.

Why it matters: the forecast projects a declining cash balance and a worsening days‑of‑cash picture. Frazier said recent property‑tax legislation enacted in December — which he described as including a retroactive credit — appears to reduce the district’s property‑tax receipts by about $3.3 million. With a roughly 75% reliance on state funding (via the fair school funding formula) and about 20% of general‑fund revenue from property taxes, he told the board small state or legislative changes can have outsized local impacts.

Enrollment shrinkage amplified the shortfall. Frazier said the district is about 44 full‑time equivalent students below the October projection and identified early graduates and an increase in homeschooling as the primary drivers: ‘‘the state has made it significantly easier to homeschool your child than it has in the past,’’ he said. That drop in FTE reduces state formula revenue and contributes directly to the projected gap.

Frazier also displayed the district’s projected days of cash and said the October forecast showed roughly two days of cash in 2029; under the updated numbers the projection turns negative farther out, which could trigger state fiscal‑distress notices if a negative cash balance appears less than two years out. ‘‘Having a negative cash balance two years out would put us in fiscal distress,’’ he said, noting state letters were sent previously to districts in that situation.

What the district plans: the treasurer noted the February forecast intentionally excludes the district’s deficit‑reduction plan and said a May filing that incorporates the board’s planned reductions and outsourcing moves should present a substantially improved picture. Absent state changes or successful deficit mitigation locally, Frazier said the district may eventually need to consider a levy to stabilize finances.

Board response and questions focused on projection assumptions and timing. Frazier described the district’s enrollment methodology — pulling EMIS data weekly and moving grade‑cohort percentages forward through a spreadsheet model — and said current projections do not foresee enrollment falling below 8,000 students. He also emphasized that the forecast covers only the general fund and that items moved to permanent improvement funds (for example, phones and certain capital purchases) reduce pressure on general‑fund outlays.

Next steps: Frazier invited questions and said the administration will present the deficit‑reduction plan for formal action later in the meeting and again in May when the forecast is updated.