The Cleveland Metropolitan School District (CMSD) trimmed $56 million off its looming budget deficit, officials shared at the most recent board meeting.
New financial projections show the district will still be in the negative in 2028. But instead of being down $96 million, the deficit is likely to be closer to $39 million.
Officials said CMSD’s recent cuts to alternative school calendars will save the district about $28 million over the next three years. The district is also planning to save money by tightening up budgets for individual schools, Chief Financial Officer Kevin Stockdale told Signal Cleveland.
Officials gave a high-level overview about the new budgeting process at a board meeting in February, but it’s unclear exactly how the new process saves money.
The district revises its school budgets every year, Stockdale said, but this year, changes were more significant. In the past, CMSD gave schools one big pool of funding based on enrollment that school leaders decided how to spend.
Starting next school year, each school will have two separate pools of money: one for staff and one for students. The district will give schools a set amount of money for each student enrolled. Officials will decide separately on the amount needed for teachers and staff in the building. School leaders will still have some flexibility on how to spend money allocated to their school. The district will also have an appeal process where leaders can ask for additional funding.
“We’ve looked at school-level staffing, looked at the calendar, and we’ve moved forward on those activities,” Stockdale said. “Those are what have brought the downward costs.”
Stockdale confirmed in an email that the district is not planning to lay off any staff in the upcoming school year. He did not answer a question asking for more specifics on how the new school budgeting process saves money.
Cleveland Teachers Union President Shari Obrenski said in an email that the district has not indicated any plans to lay off teachers next school year.
Will a new state budget impact CMSD’s financial projections?
There’s some uncertainty around the district’s new financial projections because state lawmakers have not finalized a budget, which determines how the state funds schools.
These financial projections are based on a state budget the Ohio House of Representatives recently passed. The budget is currently moving through the Senate, where lawmakers can make changes. The governor has to approve a final budget, which will likely happen in the summer.
The house budget moves away from the school funding formula lawmakers approved in 2021. That formula would have made it easier to predict CMSD’s revenue over the next several years. Instead, the district’s new financial projections assume that state funding will remain flat for the next four years. Basically CMSD’s state funding will hit a low point where the law guarantees it cannot go any lower.
There’s some risk in that assumption, Stockdale said, because there has been talk of removing that funding guarantee.
CMSD and city officials started raising alarm about the district’s budget deficit toward the end 2023, about six months after Warren Morgan was appointed as the district’s CEO. At that time, the district was expecting to go into the negative this year. The deficit was set to balloon to $514 million by 2028.
Officials pushed the deficit back by cutting funding for outside afterschool programs, reducing summer learning and trimming some positions in administration.
Then voters approved a tax increase last fall, giving the district an additional $49 million every year and pushing the deficit off once more to 2028.
CMSD is still figuring out how many schools to close
CMSD officials are currently in the midst of planning out school closures and mergers through an initiative called Building Brighter Futures. The district is aiming to save $30 million each year through the initiative.
The district hasn’t said how many schools it will close to meet that goal. Officials will come to the Board of Education with recommendations for closures in the fall. Any changes won’t take effect until the 2026-2027 school year.
The spending cuts recently earned the district an upgrade on its credit rating, which saves money in the long run, Morgan said.
“We’re working hard to make sure we put the district on a pathway to financial sustainability while also making sure all kids have access to a high quality education,” Morgan said. “That’s the two goals of Building Brighter Futures.”
