Last month, when Cleveland schools officials shared slightly rosier budget estimates for the next few years, they did so with one major caveat: School funding is up in the air right now because lawmakers have yet to sign off on a state budget. 

For now, Ohio leaders are hashing out three separate budget proposals each with their own takes on how the state should fund schools. All three introduce new rules and changes to the school funding formula that will affect the Cleveland Metropolitan School District (CMSD).

Gov. Mike DeWine presented his recommendations for the budget in February. Since then, both the Ohio House of Representatives and the Ohio Senate have proposed plans for school funding. 

Ohio schools are currently funded through a formula — often referred to as the Fair School Funding Plan — that lawmakers approved in 2021. At the time, lawmakers decided to phase in the new funding plan over six years rather than switch to it right away. 

The Senate and governor’s school proposals stick to the Fair School Funding Plan, with some major modifications. The House voted to pause the plan in favor of a temporary formula that guarantees districts will not receive less than the funding they got last school year.  

If the Fair School Funding Plan were to continue as lawmakers had planned when they first approved it, CMSD would be getting somewhere around $770 million in base state funding over the next two years, according to an analysis from nonprofit research institute Policy Matters Ohio. 

In addition to base funding, districts can also receive state funding for specific student populations and programs. 

The district would be short of that by more than $100 million under all three new budget proposals. The Senate and the governor’s budgets would cut CMSD’s base funding next year to less than what the district got this past school year, according to the analysis. 

The Senate has not yet approved its budget proposal, so some parts of it could still change. 

After that, select lawmakers from each chamber will meet to work through differences between the budget proposals each passed. Once they’ve agreed on a single proposal, both chambers have to approve it, and then they will send it to the governor to sign it into law. 

The governor has to sign off on a budget before June 30. After that, the new school funding formula will take effect on July 1. It will stay in place for the next two years. 

CMSD would lose the most under governor’s school funding plan

The Fair School Funding Plan uses statewide averages for expenses such as teacher salaries and building expenses to determine how much money a school district needs. Governor DeWine used data on average expenses from 2022 rather than more recent figures, prompting pushback from some who say inflation has increased costs for districts.

The governor’s budget would decrease base funding to CMSD by about $6.3 million over the next two years compared to the district’s funding for the 2024-2025 school year, according to Policy Matters Ohio. 

DeWine also recommended whittling down a funding guarantee the state gives to school districts that suddenly lose state funding. Basically, the state guarantees that a district’s funding cannot fall below certain historical amounts.

For now, districts’ state funding can’t fall below what they got in 2021. DeWine suggested guaranteeing districts 95% of that figure for the 2025-2026 school year and 90% of it for the 2026-2027 school year. 

Under the governor’s proposal, CMSD will rely on those guarantees starting next school year, CMSD Chief Financial Officer Kevin Stockdale said at a recent meeting. Because of the way Ohio’s school funding formula works, the recent increases in Cleveland’s property values translate to a decrease in state funding for CMSD.

“The state is saying that they do not believe that we will need additional funding for our students over the next four years,” Stockdale said. “During that same time period, their expectation is that the amount that we pay for students will increase over time.”

CMSD does get some extra money from the property value increases, but a tax law basically caps the amount the district can collect from homeowners. 

DeWine’s recommendations would also force districts to sell schools where student enrollment is below 60% of the buildings’ capacity. 

It’s unclear how many CMSD schools meet that criteria. The district recently posted data showing that only nine of its 63 K-8 schools have “healthy” enrollment levels of more than 450 students. Just three of the district’s 27 high schools meet officials’ enrollment goal of 500 or more students. Those numbers don’t indicate whether occupancy rates top 60% or not. 

House proposal keeps funding stable for districts across Ohio — and gives CMSD a small bump

The House proposal for school funding is the only one that would give CMSD a small funding bump. Compared to the district’s state funding this past school year, the House budget would give CMSD a roughly $1.5 million increase in base funding over the next two years, according to Policy Matters Ohio. 

Although the House proposal essentially freezes the Fair School Funding Plan, lawmakers ensured that no school district would get less funding than they got this past year through a sort of blanket guarantee. 

House lawmakers nixed DeWine’s requirement that districts sell schools based on enrollment levels, but they introduced a new rule to dictate how much money districts can carry over from one year to the next. 

Under the House budget, school districts can only carry over less than 30% of their operating expenses for the year. If a district carries over more than that, county tax officials would have to figure out how much to give back to homeowners by lowering property taxes.

For now, the carryover cap will not affect CMSD.  

Senate proposal slightly cuts CMSD funding

The Senate school funding proposal follows the governor’s lead more closely than the House plan does, but state senators opted to maintain the funding guarantee that DeWine wanted to scale back. 

The Senate budget would cut CMSD’s base funding by about $450,000 over the next two years compared to the district’s funding for the 2024-2025 school year, according to Policy Matters Ohio.

State senators kept DeWine’s rules about selling schools with low enrollment, with some modifications an exceptions. They also increased the House’s cap on carryover cash from 30% to 50% of annual operating expenses. 

The Senate introduced some original changes, too. 

School districts that have earned high marks on their state report cards will get extra funding based on enrollment. CMSD would qualify for extra money because it earned four stars in the progress category on its report card for the 2023-2024 school year.

The Senate’s school funding plan was also the only one to change the way the state gives out funding for students from lower-income families. 

In a CMSD meeting last year, Chief Financial Officer Stockdale said that the state’s method for determining students’ economic status was unreliable. That has led to more funding intended for “economically disadvantaged” students going to middle-class suburban districts and less of that funding going to poorer districts like CMSD.