While Whitehall City Schools has a healthy cash balance, that nest egg continues to shrink because of deficit spending, according to the district's five-year forecast.
How soon the district will need to seek its first operating levy since 1995 depends largely on the amount of funding Whitehall receives from the Ohio Department of Education in the future, said district Treasurer Steve McAfee.
For fiscal year 2018, which ended June 30, Ohio's funding cap affected Whitehall more than any of the other 600-plus public school districts in the state, McAfee said.
While other districts in Ohio received less funding than Whitehall, when the amount is calculated to illustrate how much Whitehall lost per pupil, Whitehall tops the list, he said.
McAfee said for fiscal year 2018, Whitehall received $2,793 less per student than it would have without the cap, which limited state-funding increases to 5.5 percent in fiscal 2018 and 6 percent in 2019.
McAfee said he divided the amount of additional funding the district would receive absent the cap -- about $10.4 million -- by Whitehall's enrollment of about 3,500 students to calculate a per-pupil loss of $2,793 -- the highest in Ohio.
Maple Heights City School District in Cuyahoga County took the second-biggest hit at $2,684 per student, followed by Bethel Local School District in Miami County at $2,483 per student, McAfee said.
Whitehall received $26 million in state funding in fiscal year 2018, but McAfee said the district would have received $36.7 million if not for the cap.
"We don't know what the funding cap will look like from year to year; I make assumptions in the forecast," said McAfee.
District officials will continue to appeal to legislators to consider state funding based on the individual needs of districts, such as student enrollment and property values, in lieu of a uniform cap applied to all Ohio school districts, McAfee said.
The cap hampers the ability of Whitehall and other similar districts to manage growing enrollment and other needs, he said.
Whitehall's enrollment continues to grow, but for now, the district will tap its cash reserve to balance the operating budget, McAfee said.
Issue 8 on the Nov. 6 ballot was not an operating levy but rather a permanent-improvement and bond issue to build an addition to Rosemore Middle School and an artificial-turf field at Whitehall-Yearling High School, among other physical improvements. (For results of the Nov. 6 election, visit ThisWeekNews.com/whitehall.)
Operating levies differ in that their revenue is used for the operation of the school district, such as staff salaries.
According to the district's five-year forecast, Whitehall will spend $808,254 more than its general-fund revenue in fiscal year 2019, the current fiscal year that ends June 30, 2019.
The five-year forecast shows deficit spending of $658,689 in fiscal year 2020, $676,213 in 2021, $955,882 in 2022 and $1.1 million in 2023.
The district's cash balance is projected to shrink from $9.8 million in fiscal year 2018 to $7.7 million in fiscal year 2021.
While use of the cash balance may delay the district's pursuit of an operating levy, it comes at another price: the district's financial health.
Last month, Moody's Investors Service downgraded Whitehall City Schools from a rating of Aa3 to A1.
The criteria for the decision were based on declining financial trends, recent declines in the district's tax base and caps on state-aid growth, McAfee said.
Whitehall school board members last month unanimously approved the five-year forecast. State law requires public school districts to annually submit such forecasts each fall and update them each spring.
Board President Blythe Wood said she has the "utmost respect" for McAfee and his ability to manage district finances.
"Our budget is very much at the mercy of the state budget and has taken a hit due to the cap that has been set on educational funding," Wood said.