Mason School Board Approves Financial Forecast

Mason School Board Approves Financial Forecast

The Mason City Schools Board of Education approved the high-performing school district’s five year financial forecast on October 27.  The district’s current financial condition has been impacted significantly by Governor Kasich’s veto of Tangible Personal Property (TPP) reimbursement funds. The impact over the life of this forecast is a $23.5 million decline in revenue.  

 

"Our forecast is a dynamic tool used to guide financial planning.  Understanding the assumptions are important to forecasting reliable trends as opposed to exact numbers," explained Ronda Johnson, Mason City Schools Treasurer. The biggest variable in our conversation last year was TPP - and now we know with certainty how significant the impact is on our forecast."

 

District Relying on Cash Reserves, Cost Reductions

Every biennium budget cycle brings a great deal of uncertainty to public school funding.

 

Mason’s Five Year Forecast projects deficit spending beginning in FY17.  Current cash balance will cover the deficits.  Mason has cash balance available due to $9 million in cost reductions that have been made since 2010.  However, those cash reserves will be depleted in four years and the district will need additional local revenue and/or additional expenditure reductions.  

 

 

“We’ve used the current funding model in our assumptions. As our enrollment declines and we continue to see an increase in property values, the current state funding model will assume we are “richer” (per pupil valuation) in comparison to other districts which will reduce how much funding per pupil we receive."

 

Fortunately, the district began making cost reductions in 2005; the last time voters approved a tax increase. These cost reductions helped the district prepare for reduced revenue. Today, the district is relying on its cash reserves. By June 2018, the district projects it will have approximately $22 million remaining – enough to operate schools for just over two months.

 

Since 2010, the district eliminated over 155 positions, closed an elementary school, consolidated bus stops, instituted a pay-to-participate fee, and all employees agreed to two years of wage freezes. Last year’s move to semesters and eliminating teaming saves nearly $1.5 million annually.

 

“With significant reduction in our TPP reimbursements, we have to rely heavily on our cash reserves.  Within the next two or three years we will need new local operating revenue if we are to maintain our current high-quality programs and educational opportunities for students,” said Johnson.

 

The Mason City School District has not passed an operating levy since 2005.

 

Schools/Supporters Will Continue Advocacy Efforts

 

"We appreciate our families, staff, and community members who have taken up the call for more local control of our public schools while advocating for financial stability," said Courtney Allen, School Board President. "No doubt about it - the reduction of TPP continues to be an issue for our schools."

 

On October 27, the Ohio Legislature passed S.B.208, which contains a small increase to Mason's TPP reimbursement. Mason was receiving $7 million a year in TPP reimbursement - which would have meant $42 million over six years. Under current law, the district is slated to receive $11.3 million over the next six years, but SB 208 slightly improves that by granting Mason $14.2 million over the next six years.

 

"Mason families and community supporters kept raising this issue in Columbus, and the current legislation is an effect of those advocacy efforts. Still - the work is not done. While we're grateful for the dialogue around TPP and any efforts that may help, this is far from a long-term solution," Allen said.

 

View the Five Year Forecast Presentation.

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