by Chuck Hoven

     (Plain Press April 2025) At the March Board of Education meeting, Cleveland Metropolitan School District (CMSD) Chief Executive Officer (CEO) Warren Morgan reached out to school staff and community members to help the CMSD find $160 million in savings in over the next three years. Current projections show school district facing a $96 million-dollar negative cash balance in fiscal year 2028. Warren says that if CMSD can’t project a positive cash balance for fiscal year 2028 by the end of next school year as required by state law, CMSD will end up in State receivership.

NEWS ANALYSIS

     While Clevelanders and CMSD staff are sure to come up with some creative suggestions as how to reduce the school systems’ expenditures (send suggestions to Savings@Clevelandmetroschools.org), let me suggest that cutting $160 million from the school system’s budget over three years is a bridge too far. The school system needs to look at revenue generation ideas as well to balance its budget.

     Already cost reductions of $9 million a year proposed by CEO Morgan by means of creating a single school calendar for all schools promises to devastate school programs such as those at the Davis Aeronautics and Maritime School and Rhodes High School that make use of extra school hours and extra school days to deliver unique educational experiences to their students.

     Clevelanders just passed a generous school levy and bond issue this past November, so going back to voters for more funds is not an option. With the school system projecting revenue declining from $734.9 million this year to $715,3 million in fiscal year 2028 and expenditures increasing from $733.2 million this fiscal year to $811.67 million in 2028, doing nothing is not an option as well.

     It is time for Cleveland residents to play hard ball. For too many years the City of Cleveland Administration and Cleveland City Council have been pursuing policies that have deprived the CMSD of funding from levies and bond issues passed by voters. The City administration has also refused to provide CMSD with the full amount of the revenue promised for its extra-curricular programs in exchange for the Browns stadium receiving a property tax exemption.

     With the aid of the Cleveland Teachers Union and community activists, Clevelanders should place two issues on the November ballot.

First Ballot Issue

      The first issue suggested for November’s ballot would require the City of Cleveland to reimburse the CMSD on an annual basis for the total amount property tax revenue the City has abated. For years the City of Cleveland has offered 15-year tax abatement for new construction or the increased value from rehabilitation of a house.

     A March 11, 2024, article by Nick Castele in the online publication Signal Cleveland titled Cash strapped Cleveland schools lose out on millions from tax abatements says, “The Cleveland Metropolitan School District misses out on an average of almost $29 million in revenue each year, thanks to tax breaks meant to spur new housing and businesses in the city.”

     Requiring the City of Cleveland to reimburse the school district for funds the City has taken from the school system to finance tax abatements would go a long in reducing the projected fund balance deficit for the Cleveland Metropolitan School District by increasing revenue by at least $87 million over three years.

     While the school system is deprived of property tax revenue from tax abatements, the State of Ohio bases its per pupil allocation on the school system’s ability to generate property taxes based on the value of taxable properties in the city. Because of the tax abatements the Cleveland Metropolitan School District is not able to generate the revenue that the state expects it to when calculating the school district’s per pupil allocation.

     The tax abatements also hurt Cleveland taxpayers who do not receive an abatement. They pay additional taxes to make up for the abated taxes. The abatement program largely benefits developers who can build bigger and more expensive new homes for new residents that can qualify for larger bank loans because they will not have to pay property taxes or have reduced property taxes for 15 years. In turn the developers are large contributors to City Council and Mayoral campaign coffers. The City of Cleveland also receives additional revenue from the payroll taxes generated by the new residents. Thus, it is unlikely that Cleveland City Council or the Cleveland Administration will end this program. It is better to force the City of Cleveland to use its revenue to reimburse the school system for the abatements.

     During the years of tax abatement designed to spur development, the City of Cleveland has lost population each decade. Despite all the new development, the 2020 United State Census showed Cleveland losing population again – enough to force a reduction in City Council seats from 17 members to 15 members. The continued starving the Cleveland schools of funding has also meant many young Cleveland couples decide to move to suburban communities when they have children. They hope to take advantage of school systems that offer educational programs and services that the cash strapped Cleveland schools cannot afford. The loss of families with the means to move to suburban schools contributes to the City of Cleveland having the highest rate of child poverty of any big city in the United States of America.

Second Ballot Issue

     This brings us to a second proposed ballot measure. In 1995 Cleveland City Council passed three taxes that were designed to fund extracurricular activities for the Cleveland Metropolitan School District as well as make repairs and improvements to the Cleveland Brown’s stadium. The schools were promised $2 million a year for their extracurricular activities. This promise was kept until the 2009-2010 school year when the amount was reduced to $1 million. For the next 15 years the amount has remained about $1 million. The three taxes passed or increased in 1995 – the admissions tax, the motor vehicle license tax and a parking tax — generate over $25 million a year. Most of that money has been set aside for repairs and improvements to the Cleveland Browns stadium.

     The legislation does not specify how much of the revenue should go to the Cleveland Metropolitan School District’s Comprehensive Extracurricular Activities Program or to stadium repairs. It only says that the money can be spent for these two purposes or go to the general fund of the City of Cleveland.

     A suggested ballot measure specifying that 90% of those funds generated by the three taxes should now be dedicated to the Comprehensive Extracurricular Activities Program of the Cleveland Metropolitan School District and that amount should become 100% if the Cleveland Browns locate outside of the City of Cleveland would generate about $20 million or more each year for extracurricular activities in the Cleveland schools.

     At the March 18^th Board of Education meeting CMSD CEO Warren Morgan said that one of the goals of CMSD’s Building Brighter Future’s plan is to offer Cleveland scholars “opportunities to follow their co-curricular passions.”

     Morgan said, “We also want to make sure students have opportunities to explore their co-curricular passions – that’s student activities, that’s athletics, and that’s access to STEM (Science, Technology, Engineering and Math). We have several programs across our system that are doing this. You know we just announced the all-district musical and Glenville is playing (basketball) in the state championship game. But the reality is that not every scholar has access to these programs. Some of that is due to finances, some of that is due to enrollment of scale, and we need to make sure we can provide that and define what the minimum is in CMSD.”

     Passing a ballot issue calling for the redirection of the revenue from the three taxes to the extracurricular activities program would assure Cleveland schools would be able to offer top of the line selection of extracurricular activities. Having sufficient funding for a robust extracurricular activities program would also mean schools could stay open later in the evening to provide a safe place for students while parents are still at work.

     The increased funding for extracurricular activities would also help to address the enrollment of scale issue raised by CEO Morgan. The quality after school programs will help more students to decide to attend CMSD schools instead of opting to attend charter, private schools, or move to suburban schools because those schools offer more after school programs.  Enrollment in Cleveland schools should increase.

     Time is of the essence to get these issues on the ballot for a vote in November of this year. The filing deadline for issues and local options for the November election is August 6, 2025.