Van Buren Family,
Van Buren Local School District is blessed with a community which values the quality of education provided to its students. Through the passage of the renewal levy in November 2024, our financial outlook is positive, but there are threats currently working their way through Ohio’s legislature.
The rest of this article will be based on the May 2025 Five-Year Forecast update which was approved by the Board of Education at its regular meeting on May 15, 2025.
The state legislature passes a new budget every two years (biennium), and the next two years (2025-2026 and 2026-2027) will impact this forecast update because there are currently 14 pending pieces of legislation that seek to limit growth of local property taxes.
While we wait to see what legislators will vote into law, our estimated revenue for FY25 is $16.29 million, which is greater than our estimated expenditures of $15.11 million. While a $1.18 million surplus is positive, know that we have a purpose for limiting our spending to create that surplus.
That purpose is to prepare for the budgetary restrictions the state could impose on us with House Bill 96 (HB96), which seeks to limit school district carryover cash balances to a proposed 30% of their prior year’s expenditures and to allow county budget commissions to suspend voter-approved property tax levies and the 20-mill floor in order to reduce district reserves to the 30% target. Currently, having the floor means our effective millage rate of 31.3 mills cannot be reduced below 20 mills. We won’t know whether this bill becomes a law until July 1, but we are watching it carefully because it could significantly risk future local tax growth for our district and essentially cause us to return to the voters sooner than anticipated in order to continue the current level of educational programming and operations.
What happens with HB96 is significant because it could cause us to lose revenue. Governor DeWine’s proposed budget recommendation dated February 3, 2025, also reduced funding for public schools by $103.5 million through 2026-2027. Currently, the state budget represents 14.08% of district revenue, with the vast majority of our revenue coming from local sources. Having a carryover is significant for our financial stability, knowing that revenue fluctuates based on the economy, property values, inflation, and several other factors. At the end of Fiscal Year 2024, Van Buren’s cash balance was 23% of our total expenses, and we had the second lowest carryover of public schools in Hancock County.
Another reason it is important for us to have and be able to maintain our carryover is due to unfunded mandates, such as the College Credit Plus (CCP) program. Unfunded mandates occur when the state implements a new program and includes funding to assist with the added costs but later mandates the program while removing the district’s state aid for it. We want our students to push themselves and prepare for post-high school success by taking CCP classes, but we have to be prepared to pay for these requirements and the state’s expansion and/or creation of other programs it doesn’t directly fund.
We definitely don’t want to paint too bleak of a picture as our district residents have put us in a stable financial situation, but we do want to make sure you understand we are monitoring state government decisions which could negatively impact our local situation. To reassure you, we estimate that we will have 80 True Cash Days (the number of days the district could operate without additional resources or a severe resource interruption) at the end of FY25. The Government Finance Officers Association recommends no less than 60 days of cash on hand at year end, so we are happy to be above that threshold but also recognize that is not nearly enough time to run a new levy, have it passed by the voters, and have the levy start generating revenue.
Finances are ever changing because of the many factors which impact revenue and expenditures, but we will work every day to make sure we are being as fiscally responsible as possible to most effectively serve our students and community. There is no one-size-fits-all cap on cash balances that works for every district, and the property tax implications of HB96 would be devastating to public schools.
A new five-year forecast will be presented to the board in November 2025 after the new budget bill is enacted. If you want to see our previous forecast updates on which this article is based, visit the State of Ohio’s website for public school district five-year forecasts at https://reports.education.ohio.gov/report/finance-forecast-submissions. If you have questions, please reach out to me at cschuller@vbschools.net or call the school (419-299-3863) to talk or schedule a meeting.
Have a wonderful summer!
Sincerely,
Mrs. Cathy Schuller, Treasurer
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