One year ago, the Westerville City School District’s (WCSD) May 2020 Five-Year Financial Forecast was extremely bleak, to say the least. Just two months into the pandemic, school treasurers around Ohio were attempting to predict the coronavirus’s effect on district finances with very little data to go by.
At the time, WCSD Treasurer/CFO Nicole Marshall projected the district would be left with just over $16 million in its unreserved cash balance at the end of Fiscal Year (FY) 2024. District officials immediately began working to curtail expenses, maximize the use of anticipated federal relief dollars, and lessen the pandemic’s negative impact on district finances.
As a result of these actions, plus $2 million in federal funds to offset revenue loss, the district saw a significant improvement to its finances when preparing and filing its November 2020 forecast. This forecast projected an unreserved cash balance of $50.7 million at the end of FY24. It also incorporated another fiscal year with a projected $10.2 million unreserved cash balance at the end of FY25.
Results such as this confirmed that efforts to proactively address financial concerns at the outset of the pandemic had proven successful. However, the cumulative effect of those actions, aided by an additional $6 million in federal Elementary and Secondary School Emergency Relief (ESSER) funds, became even more evident as Marshall presented the district’s May 2021 financial forecast to Board members at their regular meeting on May 24, 2021.
According to this latest forecast, the district is projected to have an unreserved cash balance of $69.1 million at the end of FY24 and $30.9 million at the end of FY25. Additionally, the November 2020 forecast projected that WCSD would begin deficit spending (when expenditures exceed revenue) by $1.6 million in the current FY21. In the latest forecast, however, district officials have been able to delay the projected start of deficit spending until FY23. Another round of anticipated ESSER funds is not yet reflected in the latest forecast. Those additional federal dollars, plus ongoing efforts of district officials to manage the budget, will help reduce and potentially eliminate the $16.25 million of deficit spending projected for FY23.
Marshall said that while the district’s proactive budget management efforts and federal ESSER funds have resulted in an improved financial position, her greatest concern remains the future of state funding and legislative efforts to expand the state’s voucher program.
“While legislators continue to debate the Fair School Funding Plan, the only thing we know at this time is that we’re supposed to have a new state biennial budget for the 2022-23 and 2023-24 school years,” Marshall explained. “There’s still a lot of uncertainty regarding future revenue we’ll receive from the state, so our forecast continues to project flat state funding.”
Marshall reminded Board members that for several years, WCSD has been a “capped” school district, meaning the state has regularly withheld about $12 million annually that the district otherwise would have received had the funding cap not been in place. Additionally, the current state budget effectively eliminated the school funding formula and cap by providing flat funding for public school districts across Ohio for two fiscal years.
“Even though the funding cap technically no longer exists, school district budgets were based upon already underfunded amounts,” Marshall explained. “In addition to being underfunded, our funds had been cut by an additional $2.8 million in FY20 due to the impact of the coronavirus on the state budget. A portion of that cut was carried forward into our FY21 budget as well, which means we are losing a total of $4.1 million in revenue from the state on top of the underfunded amounts.”
Of even greater concern to Board members and district officials is legislative efforts to expand the state’s voucher program. William Phillis, executive director of the Ohio Coalition for Equity and Adequacy of School Funding, joined the Board meeting to offer his insights and expertise on the voucher program and school funding, in general. Interested individuals can watch the complete presentation and discussion HERE.
Board members watched a video from Vouchers Hurt Ohio, a coalition of public school districts (to which WCSD belongs) suing the state over its voucher program. According to information presented in the video, Ohio’s voucher program began in the early 2000s as a “School Choice” pilot program. It continued to grow and in 2008 the state took approximately $42 million intended for public schools and provided the revenue to private educational institutions. By 2018, the amount taken from Ohio’s public schools and given to private schools stood at $350 million. The statewide amount continues to grow by about $25 million per year.
According to the Vouchers Hurt Ohio video, vouchers on average started at $1,229 per pupil about two decades ago. Within about 20 years, the average amount exceeded $6,500 per pupil. Public school funding has remained relatively flat over that same period of time, only growing from an average of $3,586 per pupil to about $4,780 per pupil. By 2010, the average amount the state was providing for each voucher student to attend a private school began exceeding the amount it was providing for each public school student.
Dennis Willard, president of Precision New Media, is working with the coalition and in the video provides a brief premise of the issue at hand and reason behind the coalition’s lawsuit.
“When the voucher program was first unveiled, it was promoted as a way to help impoverished families trapped in poor-performing districts,” Willard said. “Now we know that’s not true. The fact is, it’s a way to reimburse families already committed to placing their children in private schools. The reality? Vouchers have become a refund and a rebate program draining precious dollars from your schools. There’s a complete lack of accountability, and they’re highly unregulated.”
Marshall said in Westerville City Schools, the current impact of vouchers is over $2 million per year. She noted that prior to voter approval of the district’s last ballot issue in November of 2019, the district was able to avoid a request for new revenue for seven years, despite state initiatives that funnel voter-approved funds away from public schools and into charter schools or private educational institutions.
“Staying off the ballot for so long was an amazing accomplishment,” Marshall said. “On behalf of our taxpayers, we will continue to lobby the legislature for a better school funding model while also challenging those programs that divert taxpayer-approved dollars intended for their community’s public school system.”
School districts must file their five-year financial forecasts with the State of Ohio by November 30 and May 31 of each fiscal year. These forecasts rely heavily upon past fiscal trends and future assumptions. The updated Five-Year Forecast and all other Board action items are available online through the district’s website at www.wcsoh.org. Visitors can obtain the information by visiting the Treasurer/Fiscal Services page under “Our Departments” or by navigating to BoardDocs via the Board of Education page. Board meetings and presentations also are available to view at the district’s YouTube page at www.youtube.com/WCSDOhio.