Cleveland Metropolitan School District officials said the district will run a roughly $125 million budget deficit by 2028 if voters reject the school levy. If Issue 49 passes, the district will still be short $76 million, meaning further cuts are on the horizon.
CMSD Chief Financial Officer Kevin Stockdale gave a financial update at a Board of Education meeting this week while his team prepares the district’s new five-year financial forecast. All Ohio school districts have to submit forecasts to the Ohio Department of Education and Workforce every November.
If it passes, the school levy would raise $49 million each year, Stockdale said in an email. That would reduce the district’s projected budget deficit, but it would not eliminate it. No matter what, CMSD will have to make cuts, said CEO Warren Morgan.
“There’s work we have to do as a district to look at our finances,” he said. “We’re going to be looking at our buildings, we’re going to be looking at our program staffing models. That happens whether a levy passes or not.”
Still, passing the school levy matters because it would give CMSD time to seek community input on cuts, Morgan said. If the levy fails, he said, the district wouldn’t have time to form a long-term plan and cuts could be “painful.”
“We were able, last year when we made cuts, to not be able to touch schools,” Morgan said. “That’s not something we would be able to guarantee in a levy-fail scenario.”
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Cuts to out-of-school programs and administrative staff have reduced CMSD’s expenses in this year’s budget. When the district turned in its November 2023 forecast, officials projected an $18 million negative cash balance as soon as 2025. An update in May showed that budget cuts helped keep the district in the black until 2027, when officials projected a $110 million negative balance.
According to that May update, the district will still run a deficit, which means it will spend more money than it brings in, from 2025 to 2028.
CMSD will not get a windfall from property value increases
Cleveland property values are, on average, set to spike next year, but CMSD won’t see a huge tax revenue increase. In fact, the district anticipates a 2.2% increase, Stockdale said, while property values in Cleveland will go up by 49% on average. Taxes won’t increase as much as the property values will.
State law limits tax revenue for school districts. School levies are certified based on the annual amount of money they will raise. If property values go up, tax rates will decrease to compensate.
A small portion of property taxes stay at a fixed rate regardless of fluctuations in property values. CMSD anticipates a little revenue gain next year from those fixed-rate taxes.
“We have increasing costs, as every government entity does, and so we have the challenge of trying to make ends meet,” Stockdale said.
