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Treasurer warns of looming "revenue cliff" if emergency levy is not renewed
Summary
Coventry Local’s treasurer told the board Feb. 18 that while the district begins FY27 in a strong position, state law changes and an expiring $2.9 million emergency levy could trigger a sharp funding shortfall by FY29 unless voters renew a levy or the board adopts other measures.
Lisa, the board clerk and treasurer (speaker 2), presented the district’s financial forecast and told the board the district begins the next fiscal year with a strengthened position but faces a substantial risk if an expiring emergency levy is not renewed.
"We have a very strong financial foundation," Lisa said, citing a beginning balance and dedicated reserves including roughly $587,000 set aside for termination benefits and about $1.9 million in a capital improvements fund. She noted the district recently retired more than $900,000 in long-term general-fund debt, leaving only the high-school construction bond outstanding.
The treasurer’s primary warning centered on an expiring $2.9 million emergency levy and a set of recent state laws that limit property-tax revenue growth. Lisa said those changes — discussed in the presentation as House Bill 186, House Bill 335 and related measures — cap revenue growth at the rate of inflation and alter the "20-mill floor" calculation so emergency levies now affect the floor. "If we do not renew our 2.9 emergency levy, fiscal year '29 could result in a very devastating downward trend," she said.
Lisa described how the statutes would reduce the district’s ability to capture revenue growth from property reappraisals and explained the resulting "revenue cliff" projection for FY29, when the district would lose roughly half a year of levy collections (about $1.4 million in the first half-year) that would compound in subsequent years.
She also identified other fiscal risks: rising health-care premiums, pressure on personnel costs (which represent about 72% of total expenditures), and uncertainty in state inputs to the Fair School Funding Plan. The treasurer urged disciplined spending and strategic alignment of staffing to enrollment as mitigation steps.
Lisa recommended that the board make a spring decision on whether to place a renewal (now termed a fixed-sum levy under recent changes) on the ballot and that the board discuss the levy timeline and required resolutions at the March work session. She said the new law (House Bill 96) limits renewals to five years and changes some ballot language and procedures.
The board heard questions from members about the composition of guaranteed funding, the timeline for levy language and the district’s ability to create and hold earmarked funds for capital and termination liabilities. The treasurer said the district will continue to monitor legislative developments and prepare materials for a public discussion in March.
Next steps: the treasurer asked the board to discuss levy renewal timing at the March work session and to maintain controlled spending and strategic staffing decisions while the board considers whether to seek voter approval for a renewal on the ballot.
