Hilliard school board president: District will not ask for operating levy in November

KEVIN CORVO
kcorvo@thisweeknews.com
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Hilliard City Schools leaders will not seek an operating levy in November.

School board members do not plan to take any action by the Franklin County Board of Elections’ Aug. 5 filing deadline to place a levy on the Nov. 3 ballot, according to board President Mark Abate.

“The Hilliard City Schools district will not be placing a levy on the ballot this fall,” Abate said.

District leaders had been discussing a levy this fall, but the COVID-19 coronavirus pandemic factored into their discussions, he said.

“The goals of our last levy (in 2016) was for those funds to get us through four years of conservative spending, with the intention of being on the ballot in the fall of 2020,” Abate said. “We had discussed a small operating levy, permanent-improvements levy and a potential new bond levy this fall.

“However, during the current pandemic, our local community members and businesses have faced unforeseen hardships. We want to be mindful and sensitive to the fact that finances for our families are being pinched right now, (but) beginning this year, we will be in a situation of deficit spending.”

The district had not determined an intended millage for a levy before deciding not to pursue it, said Stacie Raterman, director of communications for the district.

Without a levy in November, the district will spend at about a $5 million deficit in fiscal 2021 and at about a $10 million deficit in fiscal 2022, according to district treasurer Brian Wilson.

Deficit spending refers to when expenses exceed revenue for a given period of time.

According to district financial records for fiscal 2020, which ended June 30, the district had general-fund revenue of $206 million and expenses of $205.4 million.

But for fiscal 2021, which began July 1 and will end June 30, 2021, the district forecasts general-fund revenue of $203.5 million and expenses of $208.8 million, leaving a projected deficit of $5.3 million in the general fund.

Typically, the district seeks a levy the year before deficit spending begins, “but these are different times,” Wilson told board members in April.

“We will be meeting in the coming months to look more closely at our finances and discussing options for a future levy,” Abate said.

Board member Paul Lambert said the district’s finances allow it to buy some time.

“Because of the healthy state of our local economy and our continued spending discipline over the past several years, the school district has the financial reserves sufficient to allow the school board to wait another year to put an operating levy on the ballot,” Lambert said.

The amount of mills the district will request will always be dependent on state funding, the local economy and “the funding required to operate the district in the manner our community desires,” he said.

Because of the pandemic, Gov. Mike DeWine on May 5 announced $775 million in budget cuts for the two-month remainder of fiscal 2020 that ended June 30, including $300 million in cuts to basic state aid to the more than 600 public school districts in Ohio.

Superintendent John Marschhausen said in May that Hilliard’s funding share was reduced by $3.1 million for fiscal 2020, and more cuts are expected for the current fiscal year that ends June 30, 2021.

Board member Brian Perry said the board is taking the action necessary to endure the current situation.

“We have had to make difficult decisions to stretch our budget and get us to the next available levy opportunity,” he said.

Board member Nadia Long said although a levy is needed, the district will reduce spending “until a time comes when the economy recovers or (we) decide on an appropriate ask from the community.”

“Our projections show that we need additional funding in fall of 2020, (but) due to the pandemic, we have seen the ill effects on the economy,” she said. “For now, we need to reduce spending.”

Perry said he is optimistic the community will recognize the board’s decision.

“We feel a levy ask would be inappropriate due to the economic strain COVID-19 has placed on the community,” he said. “It is because we empathize with our community that we decided now is not the time for a levy, (but) we have faith that when the time comes to propose a new levy, our community will support us.”

Perry said he supports requesting an incremental levy, possibly as soon as 2022.

“This would allow (the district) to slowly recover our budget over time when the economic situation will hopefully have improved,” he said.

An incremental levy is a property tax in which a voted-in millage total is phased in over a period of time, according to the Ohio School Boards Association.

Such a levy adds a series of fixed millage amounts on a regular schedule during the term of the levy, according to the OSBA. The increments also are imposed as the full voted millage, not as effective millage, according to the OSBA.

An incremental levy has a maximum term of 10 years, and up to five increment changes may be proposed during the term, according to the OSBA.

Perry said he does not speak for the board or administration but an incremental levy is “a good idea that I am advocating.”

As a hypothetical example, if Hilliard wanted a 3.1-mill incremental levy, the increment for the first year of collections could be 0.1 mill. One mill would be added to the total each of the following three years to reach 3.1 mills, but voters would have had to approve the levy only one time, Perry said.

“We will be engaging in deficit spending starting this year until we are able to generate new revenue,” Perry said. “This means a levy would need to be fairly large to put us back on track, or smaller successive levies would be (needed) ... in rapid succession, potentially leading to levy fatigue in the community. (An incremental levy) avoids both those problems.”

Perry said the district could ask for an incremental levy in 2022 that would end in 2028 and coincide with a presidential election, a preferred scenario because voter turnout is typically higher in a presidential election “and we believe as many people as possible should vote (on a school levy).”

kcorvo@thisweeknews.com

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