Marysville schools project operating shortfall by 2030, citing state tax changes and preschool takeover

Marysville Exempted Village School District officials warned the board at its May 21 meeting that the district faces a growing operating deficit and a projected negative cash balance by fiscal year 2030.

Treasurer Todd Johnson told the board the district's five-year forecast shows expenditures outpacing revenues and a shrinking cash reserve. He attributed most of the pressure to two recent state laws and the district's assumption of a preschool program. "The impact of the preschool and those two House bills essentially the drop in revenue plus increased costs is a little bit higher than what the additional revenue of the new levy is," Johnson said during the presentation.

Johnson said House Bill 186 and House Bill 129 reduce projected revenues statewide and by more than $13 million for Marysville in Johnson's estimate. He also told the board the district was required to take over a local preschool, adding about $3.5 million in projected expenditure over the forecast window.

The treasurer showed a projection that the district's cash balance policy would be at risk in fiscal 2029 and would fall into a deficit by fiscal 2030 unless action is taken. "When you're in an operating deficit, you're eating into your cash balance," Johnson said, noting that voters had approved an emergency levy on May 25 that helps but will not fully offset the combined impact of the preschool and the legislative changes.

Board members asked detailed questions about the forecast assumptions, state funding formulas and the timing of tax-credit details; one member urged community advocacy. "We have to reach out to our legislators and demand that they start putting together legislation that makes sense," board member Miss Mavery said during discussion.

Johnson said the district can pursue two basic strategies: reduce expenditures or increase revenue. He said district staff will bring strategies and convene informal meetings to discuss options, and that an August forecast update will reflect additional data but will probably still face significant uncertainty around state tax-credit details.

What happened: the presentation drew extended board discussion but no formal fiscal policy vote. The board moved forward later in the meeting on consent items and personnel approvals.

Why it matters: The forecast projects significant budget pressure from both state-level policy changes and local program changes. The district serves thousands of students and will need to weigh program priorities, potential levy asks and expenditure reductions to avoid projected deficits.

Next steps and context: Johnson said staff will provide more planning options in coming weeks and that the August forecast presentation is scheduled as required; board members encouraged community outreach to lawmakers about state funding policy.

Sources: Treasurer Todd Johnson's five-year forecast presentation and board discussion at the May 21 meeting.