State education official explains school funding, deficit process

The district has another levy on the May ballot.
BROOKFIELD -- More than 100 people filled Brookfield High School's cafeteria to hear a state school official explain state school funding and what can be done to fix the financial deficit in their district.
After the board's regular meeting Wednesday, Jack Nairus, area coordinator for the Ohio Department of Education's Office of School Accountability, detailed the funding process and how districts must to try to come up with ways to ensure no "red ink" appears in their five-year forecasts.
The Brookfield district has failed in its last several attempts to pass a levy and has made about $900,000 in cuts over the past 10 months. Despite implementing various fees to make up the shortfall, a deficit remains.
A 7-mill, continuous operating levy will appear on the May 5 ballot, and it should generate about $900,000 for the district, officials said.
In his 20-minute presentation, Nairus explained that a five-year forecast must be submitted annually to the state by Oct. 31 and that school boards need to update it between April 1 and May 31. Nairus' office focuses on the current school year as well as the following two years, he said.
"If that period shows a deficit, our monitoring takes place with a letter to the superintendent to verify the deficit," and a recovery plan can be started, he said
If a district projects a deficit plan, he continued, it must include what revenue officials see coming in and other detailed information to correct it.
Budget deficits
Individual districts are responsible for avoiding budget deficits and, if that fails, they can be placed in fiscal caution, fiscal watch or fiscal emergency.
Fiscal caution can result if a district receives a state letter and fails to respond within 60 days or if a plan in place is not being implemented. Monthly monitoring is done to look at revenue and expenditures, he added.
A district goes into fiscal watch if its deficit is between 8 percent and 15 percent; if the shortfall exceeds that amount, a state of fiscal emergency kicks in, Nairus said.
In the latter case, a commission is appointed to oversee financial and other decisions until the district's finances are "back in place," he said.
Nairus noted that Gov. Bob Taft's budget for next year includes flat amounts or up to 2-percent increases for Ohio's school districts, similar to this year's levels. The state "sets the minimum amount of money for the education of every child in the district," and should guarantee it's available, he said. If communities seek more, he continued, it's up to them to place a levy on the ballot or come up with other local means.
The Brookfield School District should have a better idea of its financial situation by the end of June, Nairus predicted.