Forecast shows stagnant revenue because of tax reform

by Laura Bednar

Aug. 18 board of education meeting

Treasurer Jennifer Knapp presented her semiannual five-year forecast of the Independence Local Schools’ financial health.

Though the state now only requires districts to project out three years, Knapp said she is sticking to five years because it’s “important to think long term.”

General fund revenue is projected to be $23 million in 2027, with 67% coming from local taxes.

Revenue is expected to decrease by 0.14% annually through 2031. Knapp explained that property tax reform will keep districts from reaching the 20-mill floor, which can produce increased revenue without passing a new levy.

Another factor affecting revenue growth is the GDP deflator, which caps growth on inside (unvoted) millage. According to ohioschoolboards.org, “The inflationary cap will be applied every three years when the county goes through a reappraisal or a triennial update.” Knapp said it caps growth at 15%, and if property values exceed that number, revenue is reduced to match it.

State funding is tied to enrollment and does not include preschool or special needs students in funding calculations. The district receives half funding for students who attend Cuyahoga Valley Career Center.

The state’s Fair School Funding Plan, which finances districts based on the cost of educating one child, will be completely phased in by 2027. However, base costs have not been updated since 2019, which Knapp said means funding is “inherently lower than costs at this time.” The district’s daily cost per pupil will be $144 in 2027.

Expenditures are projected to be $23.2 million in 2027 with salaries and benefits being the largest expense at 76%. Base salary raises of 3.5% were approved per teacher contracts in 2027, 2028 and 2029 with a 2% raise for the final two years of the forecast. By implementing a new high-deductible health plan, the district will save $500,000 a year on health benefits.

Expenditures will outpace revenue in 2027 and continue through 2031. The district’s cash balance is projected to decrease from over $10 million in 2026 to $2.7 million by 2031.

To correct the imbalance, Knapp said the district would need a 17.8% increase in revenue. It is expected that Independence will deficit spend each year of the forecast. In 2027, the deficit is projected to be $195,134, rising to $4 million by 2031.

School calendar

The board of education approved calendars for the 2027-28 and 2028-29 school years. Superintendent Kelli Cogan said a survey was sent to the community asking when parents prefer to hold spring break. There were 207 respondents; 99 said to keep it the week after Easter, 90 said to have a fixed week and the remaining respondents said to have it the week before Easter.

“There was not a clear need for it to be changed,” said Cogan.

Board member Scott Peters noted that Independence was an anomaly based on when other districts had their break. He asked if the district should align with CVCC. Independence’s spring break has matched CVCC’s once in the past five years, according to board member Carrie Sears.

For the 2027-28 school year, the first day of school will be Aug. 24; Thanksgiving break will be Nov. 24-26; winter break Dec. 20-31; spring break April 14-21; the last day of school May 31.

For the 2028-29 school year, the first day of school will be Aug. 21; Thanksgiving break will be Nov. 22-24; winter break Dec. 25-Jan. 5; spring break April 2-6; the last day of school May 31.