There is a possibility Bowling Green City Schools will need new funding in two years.
Treasurer Cathy Schuller updated her five-year forecast at the May school board meeting.
The original forecast was presented in November.
Schuller said that revenues will stay flat through fiscal year 2026 as expenditures continue to rise.
With the current uncertainty of Rover pipeline funds and the Fair School Funding Plan, school funding has been changing like students’ school photos change from year to year, she said.
“It’s been an ordeal,” Schuller said about all the changes in state funding since the plan was approved last summer.
There are possible settlement discussions between the Rover pipeline and the Ohio Department of Taxation. If there is no settlement, the next possible hearing will be in August.
Schuller anticipates revenues will grow slightly – perhaps by $600,000 – from this fiscal year to fiscal year 2026.
However, the average growth in revenue from fiscal year 2019-21 was 1.5%; the forecasted growth from fiscal year 2022-26 is 0.37%, she said.
“That’s not a change from November,” Schuller said.
State funding contributes 27% of district revenue, with property taxes contributing 57.2% of funding and income tax supplying 12.4%
For expenses, average growth from fiscal year 2019-2021 was 2.2%; the forecasted growth from fiscal year 2022-26 is 5.4%, or up 2.6% from the November forecast, Schuller said.
Personnel expenses are the largest portion of the budget, at 79%, up 2% since November due to the most recent labor contracts, she said.
“Schools are a service industry and personnel costs are going to be your largest,” Schuller said.
The new state budget has improved the district’s finances by reducing expenditures associated with open enrollment and other voucher programs, but deficit spending will continue as expenditures exceed revenues, she said.
The district’s cash balance, which is currently around $19 million, will be depleted by the end of fiscal year 2025.
Schuller stressed there are still many unknowns, including pipeline and state funding plus the steady increase in expenses as revenues stay flat.
The board’s cash reserve policy has triggered the need of possible new money levy in fiscal year 2024, she said.
“We have a strong financial position, but proactive planning is essential,” Schuller said.
Board member Tracy Hovest asked how many staff members were paid with ESSER funds, which will expire in 2024.
Schuller said there are eight people currently paid with the federal funds, and once the funds go away, salaries will have to come from the general fund.
Elementary and Secondary School Emergency Relief Fund are emergency relief funds used to address the impact that COVID-19 has had on schools.
