Upon eclipsing the halfway point of the school year, it is a good time to measure the South-Western City School District’s financial health with current items that are on target, exceeding expectations or below expectations.

It is also an excellent time to take a look forward at key financial items and indicators to consider how they may impact the district’s financial future.

When comparing actual revenue and expenditures to the projected amounts in the Five-Year Financial Forecast that was adopted at the Oct. 8, 2018, board of education meeting, all line items are within an acceptable range of variance, running slightly better than anticipated. Although the district’s current financial outlook is on target, there are some major developments at the sate level that warrant further discussion.

For each year ending in an odd number, the state of Ohio develops a two-year “biennial budget” which runs on a fiscal year basis from July 1 to June 30. The state uses a funding “formula” that calculates school district funding on a per pupil basis. The formula provides additional funds for students with special “categorical” needs. These categorical needs areas include, but are not limited to, economically disadvantaged students, special-education students, and limited English proficient students. The main challenge with the state’s education funding formula is that there currently is not enough money to fund it. Once all the students in the state are placed into the formula, the calculation forces the state to place a cap on some districts because the funds are not available to fully fund them.

The South-Western City School District has been one of these “capped” districts for many years.

For the current fiscal year 2018-19, the district is $10.6 million into the cap, meaning that if the state were able to fully fund its own formula, the district would receive an additional $10.6 million this fiscal year alone.

Last fiscal year, the district was $17.4 million into the cap. Unless the way school districts are funded in Ohio drastically changes, the district will most likely continue to be a capped district under the new biennial budget.

The biennial budget process kicked off when Gov. Mike DeWine introduced his executive budget. Once introduced, the budget process moves from the Ohio House to the Senate, and finally back to governor for final passage and implementation.

State funding currently represents roughly 54% of the district’s operating revenues. Every 1% change in funding from the state equals roughly $1.5 million in revenue.

Obviously, there are many moving parts to the district’s finances; however, it will be imperative to continue to check the progress of the state’s new biennial budget to insure that the district remains on course with what has been laid out within the forecast.

Hugh W. Garside Jr. is treasurer of the South-Western City School District.