State General Fund & Fair School Funding Concerns

Posted Date: 05/05/2025

Dear Orange Families and Staff,

Currently, the Governor’s proposed biennium state budget is making its way through the legislature. We always follow this process closely, but this year, House changes and those to be considered in the Senate have significant implications for public schools, and Orange is no exception. Two particular budget concerns to watch involve carryover balances and the funding formula.

General Fund Carryover
While state funding represents a smaller portion of our budget (about 5 percent), the proposal that has been passed by the House and is now in the Senate would impact our local property tax funding — which makes up the majority of our budget (about 80 percent). State lawmakers are considering implementing a cap on the cash balances maintained by public school districts and would potentially return a portion of that funding to homeowners. While this idea has been described as tax relief, it actually may have a negative impact on both homeowners and school districts. 

• Why Do School Districts Maintain Cash Balances?
  Maintaining cash balances is a key aspect of responsible financial management for public school districts. These funds help districts manage rising costs due to inflation and provide a buffer for unexpected expenses—ensuring students' educational experiences remain uninterrupted. For a district like Orange, a lower cash balance could lead to more frequent requests for additional funding through local ballots.
   
• How Could This Proposal Affect Homeowners and Schools?
  Placing a cap on school district cash balances could introduce financial instability for both homeowners and schools. Property tax bills may become less predictable, fluctuating from year to year. School districts may also be forced to return to the ballot more often to request funding for essential academic programs—costs that were previously covered by reserves. Ultimately, this proposal could undermine local funding already approved by voters, threatening local control and the stability of school budgets.

Fair School Funding Plan
To help address a funding system that has been found unconstitutional multiple times, a bipartisan effort over several years resulted in the Fair School Funding Plan (FSFP), funding based on a formula consisting of inputs of minimum costs to educate a child in Ohio. This funding model has been in place for the past two budget cycles, and now the House has opted to abandon it. While Governor DeWine proposed to continue using the formula in his budget, his version still represented a shortfall since he opted to use the inputs from FY 2022 instead of current costs. At the same time, state funding of vouchers, allocating over a billion dollars to be spent on private and parochial schooling, takes away valuable resources that could be used to properly fund public schools. A fully-funded FSFP would result in approximately $1.9M in new revenue for Orange over the biennium; however, the current House budget only proposes approximately $650K, representing just over one-third of the formula’s recommended revenue. Due to our relatively lower dependence on state funding, this concern is secondary to the aforementioned carryover issue, but appropriate state funding is important to all public school districts.

What can we do?
As this proposal continues to wind its way through the state legislature, we are continuing to work with our state professional organizations such as the Buckeye Association of School Administrators, the Alliance for High Quality Education, the Ohio Association of School Business Officials and the Ohio School Boards Association, which are advocating on behalf of school districts like ours. 

At this time, we encourage you to reach out to state legislators and let your voices be heard, especially Jerry Cirino, chair of the Senate Finance Committee and Andrew Brenner, Senate Finance Committee member. Jerry Cirino also represents our region, so he, of course, is key. He can be reached via email at Jerry.Cirino@ohiosenate.gov or by phone at 614-644-7718. Likewise, contacting local representatives Phil Robinson and Juanita Brent, legislators who understand the nuances and importance of these concerns will be helpful as well. For your convenience, here are links to a Senate Directory and House Directory for Ohio.

The Orange City Schools and the municipalities we serve are as strong as ever thanks to our amazing and successful partnership. This proposal has the potential to undermine both local control and responsible financial planning. We will continue to monitor the progress of the biennium budget proposal and the potential impacts it could have on our schools.

Sincerely,

Lynn Campbell, Ed.D.
Superintendent, Orange City Schools

Todd Puster
Treasurer/CFO, Orange City Schools