The South-Western City School District anticipates it will lose almost $3.38 million in state funding over the next two months.

The amount represents about 2.4% of the $142 million in basic per-pupil state aid the district is receiving for the entire 2020 fiscal year, which ends June 30, district treasurer Hugh Garside said.

"Two-and-a-half percent or so may not sound like a lot, but it is a significant amount for us because we rely so much on state funding as a source of revenue," he said.

The share of South-Western's operating revenue that comes from the state was a little less than 60% of the district's overall revenue before the nearly $3.38 million reduction was announced, Garside said.

The $3.38 million in state funding represents about 1.26% of South-Western's total operating expenditures for fiscal 2020, he said.

"We're definitely expecting additional cuts in state funding will occur for the next fiscal year," Garside said. "That's a given."

What isn't known is the size of the additional reduction that will be included for fiscal 2021, which begins July 1, Superintendent Bill Wise said.

Gov. Mike DeWine on May 5 announced a reduction of about $300 million in basic state aid for K-12 schools as part of $775 million in budget cuts for fiscal year 2019 to address the effects the COVID-19 coronavirus pandemic and related shutdowns is having on state tax revenue.

The cuts in funding to school districts were not based on a flat percentage, Wise said.

The amount of a district's reduction is tied to its wealth, he said.

Districts that are considered to be wealthier, such as Upper Arlington, have seen larger reductions.

A 10% reduction in state funding for South-Western for the 2021 and 2022 fiscal years would mean a loss of about $27 million over the two years, Garside said.

He said that percentage does not represent his estimation or prediction of future state funding cuts, but it is a measuring stick of the potential effects additional funding cuts for South-Western could have.

Despite the cuts, South-Western leaders are not expecting to return to the ballot with an operating levy soon, Garside said.

Voters approved a four-year operating levy in August 2009 and the district has not needed to return to the ballot since then.

"We have been prudent with our finances, and we've made it a priority to have a cash-balance carryover each year just to have a safeguard in case an unexpected financial situation occurred," Garside said.

South-Western is projected to have a cash balance of $213.41 million at the end of the fiscal year, he said.

"We try to maintain a cash balance representing at least seven or eight months of our operating expenditures," Garside said.

The district's operating expenditures for the fiscal year total $270.88 million, he said.

The district's overall expenditures, which include advances and transfers to other funds, total $273.59 million.

Even with the cuts in state funding announced May 5, revenue sources are expected to be about $15 million more than expenditures this year, Garside said.

Total revenue is expected to be $288.58 million, he said.

"We spend less than the state average on per-pupil expenditures," he said.

"The most recent data we have, for fiscal 2018, we spent $10,559 per pupil, compared to the state average of $11,953."

South-Western is not planning any immediate cuts to its programs or staff, Wise said.

District officials will begin to look for potential ways expenditures can be reduced, he said, and where possible, will reduce staff by attrition when someone leaves the district.