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Chagrin Falls treasurer warns of deficit spending as state school funding shifts burden to local taxpayers
Summary
The district treasurer told the board the general fund will begin drawing down reserves this year, citing state funding reductions and policy changes that shift costs toward local property owners; officials said they will pursue efficiencies and monitor pending state bills.
The Chagrin Falls Exempted Village treasurer warned the board that the district is entering a period of deficit spending as changes in state school funding shift more of the tax burden to homeowners.
The treasurer (S3) said the general fund began October with about $23.7 million, collected roughly $387,000 in revenue and spent about $2.9 million that month, leaving a monthly deficit of about $2.4 million and an ending cash balance of approximately $21.3 million. "We are almost exactly where we were this time last year," S3 said, adding that year-to-date revenues track closely with the prior year but that the district will spend down reserves until the next tax settlement in spring.
Why it matters: The treasurer told the board that the state's share of education funding has declined over decades, increasing the share borne by local property owners. "In 1999, the state was covering over 45% of the cost of education," S3 said, and noted the Fair School Funding Plan inputs were not updated recently, which depresses the state's calculated share and raises local pressure.
S3 outlined how business-tax changes and the operation of House Bill 920 (discussed in the presentation as "HB 920" and related rules) have shifted more of the property-tax burden to homeowners, especially in districts that exceed the so-called "20-mill floor." "As business taxes have been phased out," S3 said, "the business portion has gone down to 32.5% and homeowners are now responsible for roughly 67.5% of educating our kids in Ohio." The treasurer cautioned that exact local impacts depend on pending legislation and valuation timing.
Board members pressed for specifics about likely revenue from a local real-estate development cited in recent news. When a board member asked whether the Cleveland Clinic's reported sale-and-leaseback of 21 buildings (one listed in Chagrin) would be a "game changer," the treasurer said, "Not from one building." The treasurer added that if a transaction occurs during the current calendar year, valuation changes would likely show up on 2025 valuations and be taxed in 2026, but county timing could delay that effect.
The treasurer also flagged a roughly 6% increase in premiums for the district's self-insurance fund next year to cover anticipated claims, and recommended continuing to monitor expenses and pursue efficiencies. Board members described examples of efficiency measures they already use — hiring freezes through attrition, combining low-enrollment electives, and reviewing supplemental contracts — and said the district will consider deeper adjustments if deficit spending continues.
The treasurer directed board members to slide materials and an online page with links to the underlying data and a table of pending legislation. The presentation closed with a note that while the district can absorb moderate revenue swings, sustained lower state support would require careful, district-specific decisions about programs and staffing.
What's next: The treasurer and staff will continue to track pending bills and valuation timing and return to the board with more detailed forecasts and options if revenue projections worsen.
