by Chuck Hoven

     (Plain Press December 2023) The Cleveland Metropolitan School District’s (CMSD)Five-Year Forecast projects huge deficits beginning in the 2024-25 Fiscal Year. Presented at the November 21^st Board of Education meeting held at Max Hayes High School, the forecast indicates an unencumbered positive cash balance of $125.1 million at the end of this current fiscal year (2023-24). However, the ending of funding from the federal American Rescue Plan Act Elementary and Secondary School Emergency Relief Fund beginning next school year, means that programs and projects funded over the past few years by an annual allocation of roughly $120 million federal dollars will now be shifted to the CMSD General Fund.

     Cleveland Metropolitan School District Chief Financial Officer Kevin Stockdale in his presentation of the Five-Year Forecast of revenues and expenditures to the Board of Education and the Community showed CMSD’s year-end unencumbered cash balance at a negative $18.3 million at the end of the 2024-25 school year. Without new sources of revenue, the negative cash balance is projected to increase to -$168 million by the end of Fiscal Year 2025-26; increase to -$335 million at the end of Fiscal Year 2026-27; and increase to -$514 million by the end of fiscal year 2027-28.

     In the 2023 Fiscal Year CMSD expenditures are projected at $682,790,928.  The expenditures are projected to be at $874,431,658 by the end of the Five-Year Plan in 2028. CMSD currently has 32,985 students.

     Real estate property tax revenue accounts for 31.47% of the district’s total annual revenue. However, the property tax revenue which historically increased at a rate of 4.09 percent per year is projected to be relatively stagnant with an average annual rate of increase of only 0.56%. Despite well over a billion dollars in new real estate having been constructed in Cleveland over the past 15 years, CMSD’s revenue from real estate property tax is stagnant due to the City of Cleveland’s policy during that period of awarding 15-year 100% tax abatement to all new residential construction. Real estate Property taxes brought in $219,577,033 in the 2023 Fiscal Year and are projected to bring in $225,740,623 in Fiscal Year 2028 the last year of the five-year forecast.

     While the projected revenue for CMSD is stagnant, the projected expenditures are not. The five-year forecast projects that health care cost alone will increase by 9.1% for each year through 2028. Payroll costs are projected at a 1% yearly increase.

     CMSD Chief Executive Officer Dr. Warren G. Morgan listened attentively as paraprofessionals attending the Board of Education meeting suggested cuts the administration could make, so despite the deficits, it might find the resources to bring paraprofessional salaries up to a living wage. The paraprofessionals also called for hiring more teachers to allow for smaller class sizes in kindergarten through second grade.

     The paraprofessionals’ suggestions included a school-by-school survey of expenditures to see which purchases could be eliminated. They called for cuts in the CMSD administrative staff and use of district facilities to house administrators rather than renting at 1111 Superior Avenue. One teacher said Columbus has more students in its school system with 370 fewer administrators than Cleveland.

     The paraprofessionals suggested more investment in teachers and paraprofessionals would lead to smaller class sizes that would attract more students to CMSD – thus increasing State of Ohio per pupil revenue. The five-year plan projects that Cleveland will lose about 160 students per year. In Fiscal Year 2023, the State of Ohio’s Fair School Funding Plan’s allocation of cost per pupil was $7,352.