Five-year forecast predicts funding woes by 2027

by Melissa Martin

Brecksville-Broadview Heights City School District officials say they could have to turn to voters for additional operating funds as early as 2026, as financial projections show the district could be operating in a deficit by fiscal year 2027.

As part of his most recent five-year forecast presentation, Treasurer Craig Yaniglos told members of the school board that the administration is keeping “a careful watch” on the potential levy cycle in an effort to avoid deficit spending. He explained that as of June 30, the district’s unencumbered cash balance was $23.7 million. Projections currently call for that number to drop to just over $16 million for the same time period in 2027.

“[$16 million] might sound like a lot of money to some, but it doesn’t really go that far when you take into account all the salaries, benefits, purchased services and supplies [the district] has to fund,” Yaniglos said, noting that inflation and the rising cost of goods and services, especially health insurance rates, will play a pivotal role in how the forecast holds up over time.

Yaniglos estimated that to make up the projected $3.8 million budget deficit expected in fiscal year 2027 – and end the year in the black – the district would need to pass an operating levy of at least 2.67 mills in 2026.

While Yaniglos said the proposed levy is not a definite for the district at this point in time, he noted that factors that will ultimately determine the district’s true financial position come 2027 include enrollment figures, state funding, unfunded mandates issued by the Ohio Department of Education and even the growing use of state vouchers.

“Though we are not affected by the voucher system currently, we could be one day in the not-so-distant future,” Yaniglos said, adding that any changes to any of these factors could influence the numbers positively or negatively moving forward.

Yaniglos also said that careful planning and cautious spending or judicious budget cuts could potentially delay the district’s need for additional revenues for another year or more.

“I chose to recommend fiscal year 2026 because we will not be on a fiscal cliff yet,” he said. “That means that if we put something on the ballot and it failed, we would still have time to give it another run.”

Conversely, Yaniglos said, if the school board elects to wait too long to request additional money from voters, it could effectively be “[putting] all of its eggs in one basket.”

“And then if it doesn’t go, you can start down a bad path where things start to compound,” he said.

School board President Mark Dosen said making the board and the public aware of potential financial troubles that could be coming down the pike is the reason the state mandates all districts in Ohio to update their five-year forecasts twice a year.

“There are things the district can control and that is primarily our expenses. That’s the main lever in this game that we are playing,” Dosen said. “Unfortunately, we cannot generate any new revenue without the voters’ consent.”

Dosen said the other factor the board can’t control is state funding, which has the potential to increase or decrease depending on the funding formulas utilized between now and 2026.

“There’s a lot of moving parts in this, which is why we have to revisit the topic every six months,” he said. “But it’s a good planning tool also. [As a district,] we are stable now, but we [need to] start thinking of ways we could push out the next operating levy a little further by making some strategic reductions now.”

Yaniglos is set to present the board with an updated five-year forecast at the November board meeting. ∞