Highland Local School District facing deficit

by ChrisStudor

Nov. 21 school board meeting

The Highland Local School District is in a deficit spending status, District Treasurer Neil Barnes announced Nov. 21 as he delivered the district’s five-year financial forecast.

The deficit increases each year of the five-year forecast period.

According to Barnes, infusing new revenues, reducing expenses or a combination of these two options will need to occur in the not too distant future.

Barnes explained that state law requires school districts to submit a five-year projection of operational revenues and expenditures, along with assumptions to the Ohio Department of Education prior to Nov. 30 each fiscal year. An update is also required to be filed annually by May 31.

According to Barnes, the district ended fiscal year 2022 with an $833,663 deficit. The district was able to maintain negative spending by using part of the district’s $22 million in carry over funds, however Barnes cautioned the district’s carryover funds will run out in 2027.

The district’s estimated general fund revenues for fiscal year 2023 are $36.2 million, with expenses set at just over $38 million. By fiscal year 2027, estimated general fund revenues are $38.1 million with expenditures at $45.5 million.

“The district’s policy is to always have three months worth of working capital in reserve and that dips below that in fiscal year 2025,” Barnes said.

Barnes pointed out that the district averages between 15 and 20% below the state average for per-pupil costs. He added that the district has not asked for new operating funds since 2011, although there have been renewal and bond issues on the ballot.

The district is 75.8% locally funded with 67.8% coming from real estate tax for fiscal year 2023.

“State school funding is projected to remain flat until new state budgets are known,” said Barnes. “However, the state deems Highland a ‘wealthy district’ and it is not likely that Highland would receive any substantial increase even with a new state funding policy. Total revenue is estimated to grow by an average of about 1.8% annually over the next five years. New construction and increased values will add some new tax revenue. There are so many things we just don’t know at this point in time.”

With regard to expenditures, they are estimated to grow by an average of about 4.6% annually during the forecast period, said Barnes. Personnel costs, including salaries/wages and fringe benefits, represent about 80% of the total budget. Barnes added that purchased service costs have risen considerably for safety/security, mental health and nursing and that utility costs are expected to rise substantially in the next 12 to 18 months.

“The district has not asked for additional operating funds since 2011, that’s the last time a new levy was passed. You have to think about the value we are getting from an academic to athletics and the excellent environment we are providing our students for learning, we are still exceptional,” said Dr. Norman Christopher, school board president.

In other news, Executive Director of the Highland Foundation, Theresa Wright, gave a recap of the annual Great Gifts dinner held in November. She said approximately $150,000 was raised, with $27,400 from the dessert auction alone.  Foundation funds provide for additional learning experiences for students and staff beyond the traditional school budget.

Additionally, Superintendent Catherine Auckerman said the district is unable to fulfill a request by the three townships that form the school district, Hinckley, Granger, and Sharon, to provide the Highland Marching Band for each township’s individual Memorial Day parade. She said the band director has recommended going forth with splitting the band in two, in order to maintain a quality of performance, with one township having to do without the marching band every third year. ∞