October 19th the Board of Education (BOE) and Administration shared some financials that may seem dramatic to many, and we thought we'd offer a few important facts to help our community better understand the issues at hand, and, the reason understanding this is so important.
State funding is insufficient, and places constraints on the ability of Ohio school districts to generate revenue
In 1976 Ohio passed a law referred to as HB920 that prevents the millage paid from property taxes to rise as property values rise, forcing all districts in Ohio to pass levies every 3-5 years on average. Levies passed for 4+ years are often very high and it is difficult to plan for unpredictable cost increases within the life of an operating levy.
In 1997, the Ohio Supreme Court declared the State's school funding system unconstitutional, specifically citing four major flaws in the system, including insufficient state funding for school facilities and a flawed school funding formula.
In the 2021 financial summary, the Administration showed 28% of FHSD funding comes from the state, and that has been declining for years.
The failure to act has caused a self-imposed crisis …
The board was advised early this year that the Forest Hills School District (FHSD), like all others in Ohio, needed to pass a levy and the levy millage would increase the longer they waited due to projected gaps/shortfalls.
For reference, the term "millage" is derived from a Latin word millesimum, meaning thousandth, with 1 mill being equal to 1/1000th of a currency unit. As used in relation to property tax, 1 mill is equal to $1 in property tax, which is levied per $1,000 of a property's determined taxable value. Going forward, we will reference any millage as “mill”.
If the board had put a levy on the ballot this November 2022, they would have been able to ask for only 4.2 mill which translates to about $515 annually for a home valued at $350K (about $1.41 per day).
If the board decided to wait, FHSD Treasurer Alana Cropper advised the levy would likely be 6.7 mill, or about $820 annually for a home valued at $350K (about $2.25 per day).
See a simple table for mills per house value here
Two of the current school board members, Bob Bibb and Katie Stewart, led the campaign against the 2019 levy. They were joined by Sara Jonas and Linda Hausfeld to campaign AGAINST any future levies during their race in 2021.
A smart move 30+ years ago is no longer supporting the need …
The Permanent Improvement fund (PI fund) is slowly depleting and will soon need to be supported with a millage increase via a levy as well. In the 1980’s, the FHSD set aside some $$ and used only the interest earned to pay for capital projects (the only thing PI fund is allowed to be spent on, per Ohio law). Interest on that fund was earning around $1M per year, until the early 2010’s, when it was only averaging $20K per year.
In short, decisions made by the board in place 30 years ago saved the community money by avoiding a PI fund for decades, however, this decision avoided the community's familiarity with precedent and additional millage now needs to be explained for community education.
In 2019, a 1/2 mill value was included in the levy, to help support the PIF, but it has not been enough to both support the repairs of the district AND help pay off the bond from 2014. One year ago, the Permanent Improvement Fund was $4.4M, and is now $1.8M. Remember, money in this bucket can only be used for capital improvements (roof replacement, asphalt, painting, etc.)
Why do we need to know all of this?
In the October meeting, the board may show a significant gap in our revenue vs our projected costs, and it could be viewed as a tactic to create urgency where the public feels compelled to make rash, poorly-researched decisions, like consolidation. We want to make sure the community has a chance to hear the information with an existing baseline of understanding.
As a result of this board's decision to delay a levy past 2022, this board has decided to accept the need to ask the community for a higher mill for operating costs, and, pass that emergency on to the community they committed to serve as elected leaders.
The discussion during October's board meeting confirmed Alana's statement earlier in the year, when she stated that the assessment is still largely unchanged, the total millage likely needed from the community if a levy were to be proposed in 2023 is around 6.5-7.0. (See impact of that millage per home market value here)
Consolidation isn't the only way we can address this stress ... one near-term way we as individuals can take action is by voting for state legislative candidates that support funding public schools (Vote early now, election is Nov 8) and have committed to take action to address the state issues. We hope the board quickly considers & presents other options as well, or, moves quickly to get a levy on the ballot for May 2023.
What should I do with this information?
Continue sharing this information and this website with friends, neighbors, and family in the district. Knowledge is power, and the increased awareness serves as wide-spread oversight and the protection from misleading information. We need to remain vigilant and aware of the opportunities and risks our district faces so we can work together with the board and administration to outline possible solutions to the issues that are mutually agreeable to the leadership and this community.
The views and opinions expressed by individuals and entities on this blog are their own and do not reflect the views or positions of AdvocateFHSD.org.
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