By Rick Palsgrove
Groveport Madison Schools’ expenses are projected to exceed the district’s revenues by fiscal year 2026 if additional revenue is not generated, according to the district’s latest five year forecast.
Groveport Madison Communications Director Jeff Warner said this five year forecast is based on financial modeling software provided by the state and that the district is waiting for its state funding to be finalized.
The district’s five year forecast shows a revenue surplus is expected in fiscal year 2022. However, according to Groveport Madison Treasurer Felicia Drummey’s report in the five year forecast, “By the last year of the forecast, fiscal year 2026, the district is expected to have a revenue shortfall where expenditures are projected to be greater than revenue by $14.2 million. The district would need to cut its fiscal year 2026 projected expenses by 15.2 percent in order to balance its budget without additional revenue.”
The district’s cash balance is positive at year end fiscal year 2022 but is projected to worsen by fiscal year 2026.
“A worsening cash balance can erode the district’s financial stability over time,” said Drummey.
To compare the year end cash balances (which Drummey describes as being the district’s “savings account”), according to the five year forecast:
•The district’s cash balance with renewal/new levies would be - in 2022: $31.5 million; in 2023: $31.5 million; in 2024: $27.9 million; in 2025: $20.7 million; and in 2026: 10.1 million.
•The district’s cash balance without renewal levies included would be – in 2022: $31.5 million; in 2023: $31.5 million; in 2024: $27.9 million; in 2025: $18.9 million; and in 2026: $4.6 million.
The district’s most recent operating levy was approved by voters in 2019 and it is set to expire in 2024. That five-year levy was a “no new taxes” levy and it was the renewal of an existing levy.
“We promised the community we would be fiscally responsible and not ask for a levy before 2024,” Groveport Madison Superintendent Garilee Ogden previously stated.
The district had revenues totaling $87.1 million in 2021. Of that amount, 46.2 percent comes from state aid; 36.2 percent from local taxes; 2.6 percent from restricted state aid; and 6 percent from other revenue including tuition and interest. The remainder is from miscellaneous sources.
The district had expenses totaling $78.1 million in 2021. Of that amount, 43.6 percent is employee salary and wages; 28.5 percent is purchased service; 20.1 percent is employee benefits; 3.1 percent is other; 2.3 percent is supplies and materials; and 1.4 percent is capital expenses.
Drummey has noted most area school districts spend around 80 to 85 percent of their budget on employee salaries and benefits while Groveport Madison only spends about 74.2 percent.
According to Warner, personnel costs are the dominant expense in school districts because schools are service organizations whose main resources are its people.
Warner said, when reviewing the forecast, it appears the amounts of the district’s revenue and expenses have dropped. He said this is because funding for private and charter schools used to be funneled through the local public schools. However, that is no longer happening as, under the state’s new funding formula, the private and charter schools are now receiving their state funding directly from the state instead of being channeled through the local public schools.