Cuyahoga Heights board warns proposed state cap on school reserves could force millions in refunds

Cuyahoga Heights Local school leaders warned at their April 9 board meeting that a provision in the state budget substitute (House Bill 96) that would cap school general‑fund carryover could force large refunds from districts and imperil planned projects and operations.

"When this first came out, this was equivalent to about a 12 and a half million dollar loss," Superintendent (speaker 5) said, describing an early simulation based on fiscal‑year‑24 figures. Treasurer (speaker 2) added that under the state’s framing the cap would reduce a district’s collected millage by the difference between its current cash balance and the statutory ceiling and that the district’s FY24 cash balance figures — about $17,342,438 against roughly $17,768,633 in expenditures — produced a near‑100% carryover by that calculation.

The administration and trustees ran scenarios in public during the meeting to show how the cap could affect the five‑year forecast: a one‑time reduction in expected property‑tax receipts could force the district to use cash reserves that leaders say were budgeted for future capital projects or to return revenue to taxpayers, creating cash‑flow risk around payroll and vendor payments. Treasurer (speaker 2) said the district holds a mix of liquid and longer‑term investments — citing about $20 million in STAR Ohio and approximately $5 million in other investments in the simulation — and that forced refunds would complicate timing of planned work such as roofing and fire‑alarm projects.

Board members and officials framed the change as part of a broader statewide effort. Superintendent (speaker 5) and others noted the Alliance for High Quality Education and other groups are monitoring the proposal; they also referenced a separate Senate proposal (Senate Bill 93) that would create a statewide per‑pupil funding model. A treasurer’s spreadsheet shown at the meeting calculated that districts statewide with carryovers above the original 25% threshold totaled about $5.1 billion in FY24, a figure speakers used to explain the potential scale of redirected funds.

Officials urged local advocacy as the bill moves to the Ohio Senate and stressed uncertainty over which fiscal year the legislature would use for any calculations. "We were giving you the worst‑case scenario as of today, hoping it only gets better from here," Superintendent (speaker 5) said. Board members asked whether transfers between funds or moving money into permanent‑improvement accounts would avoid the cap; presenters said the cap targets general‑fund carryover and that moving money among accounts may not prevent the reductions if the statute's implementation uses prior‑year forecasts.

The board did not take any formal action on the state proposals during the meeting but noted timelines for local processes — the treasurer requested the signed annual tax‑rate resolution be returned to the budget commission by May 2 — and said trustees will continue collaborating with county and statewide partners to refine impact simulations and prepare outreach to legislators.

The administration said the simulations are preliminary and contingent on the bill’s final language and which fiscal year the legislature applies. They recommended district stakeholders monitor the bill’s progress in the senate and prepare contingency plans for capital projects and potential levy timing.