Bexley treasurer warns state carryover cap could force quicker action; board adopts resolution opposing proposal

Treasurer Kyle Smith told the Bexley Board of Education that the district's current May forecast shows continued deficit spending out of operating reserves in summer months and that proposed state changes to carryover rules could force earlier local decisions.

"We're living off our cash reserves for May and June, essentially spending $7-plus million dollars with no revenue coming in," Smith said, explaining the seasonal timing that shapes the district's cash balance. He reviewed assumptions on property and income tax revenues, staffing FTE projections, benefit-cost trends and the mechanics of encumbrances and payroll liabilities that can make end-of-year balances appear stronger than spendable cash.

Smith walked trustees through the potential impact of state proposals (discussed in Senate and House committees) that would cap a district’s carryover percentage and shorten forecast windows. He cautioned that a uniform percentage applied statewide could be disruptive because districts operate on different revenue/tax timing. "The timing is really a concern as well regardless of whatever percentage," Smith said, describing how a cap could trigger reductions or require transfers that undermine planned capital or severance reserves.

During discussion, trustees asked whether alternate uses of reserves—transfers to capital-projects funds, severance funds or other restricted funds—would preserve flexibility and meet any new statutory tests. Smith said a capital-projects transfer (O70) and transparent documentation are options that some districts are using to manage timing and comply if a cap takes effect.

Before adopting a board resolution opposing the 30% carryover cap and the reduction of the forecast window from five to three years, members debated whether any fixed percentage set by the state would be appropriate. The board voted to adopt a resolution (as amended) that opposes the 30% cap and any prescriptive statewide cap and urges retention of five-year forecasting.

Next steps: the board authorized staff to continue monitoring state legislation and to prepare any administrative steps (transfers or resolution language) the board may need if carryover caps advance in the biennial budget process.