5-Year Forecast

“Five-Year Forecast”…..These three little words emerge every October (this year in November due to some changes with the state budget) and May in school districts across the state of Ohio. Unlike our last blog, this forecast has nothing to do with weather, yet it can bring storms to any school district that does not keep an eye on it. 

Ohio law requires that school treasurers file a five-year financial forecast in October and May each year. School districts are responsible for showing their revenue sources and expenditures. The state monitors these reports to gauge whether school districts are financially stable. 

Our revenue comes from various sources. The two primary sources are the state foundation and locally generated tax dollars. Our school district is considered a property wealthy school district by the state of Ohio. For the 2019 – 2020 school year, we will receive $2,787 from the state per pupil. Depending on the district, this state aid can range from $433 per pupil in Upper Arlington to $14,383 per pupil in East Cleveland City Schools (If you want to see all schools, you can find it here). 

Local levies provide the other primary revenue source for our school district. We currently receive funds from a 5-year substitute levy that was renewed in November of 2018 and a local 1% income tax. Our substitute levy goes directly into our General Fund that supports classroom instruction, salary and benefits, and operations, like paying for electricity. Our income tax supports both our General Fund and Permanent Improvements. Permanent Improvements are spent directly on maintaining our buildings. For example, this summer we replaced our middle school roof using Permanent Improvement funds. To operate and maintain our schools, these local levies are essential. We deeply appreciate the support and trust our community has shown to our schools by passing these levies.  

The big question is “What is the financial state of our school district?”. Overall, our financial position is good. With the renewal of 5-year substitute levy, our school district is in relatively good shape for the next several years. We anticipate entering deficit spending over the next two to three fiscal years, but that is anticipated in public education spending. Our financial services department monitors long-term costs allowing us to absorb this spending cycle. As we consider the financial picture in our district, there are a few items to consider:

  • Fairbanks Local Schools has not asked for new operating funds since 2008.

  • State revenue has been relatively flat over the last several years. 
  • Expenditures are anticipated to increase 3-4% annually due increased costs, inflation, etc. Our budget process and financial services office provides oversight to control cost and expenditures. 

Annually, our financial services department is audited by the state. Last year, our treasurer, Aaron Johnson, and his department were recognized by the state auditor for their work. This is a fantastic honor and a credit to the work of our financial services department. Aaron and his department provide a great snapshot of their work on our district website: https://www.fairbanks.k12.oh.us/treasurer-s-office–8.

Our five-year forecast is a tool we use to measure the financial stability in our district. Our goal is to balance efficiency and effectiveness. During this time of year, and again in the spring, we take a long look at the forecast. We truly appreciate the trust our community places in our school district and are grateful for the on-going support. 

-Adham Schirg, Fairbanks Local Schools, Superintendent

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