By 1808Delaware
Westerville City Schools is projected to remain financially in the black through fiscal year 2031, strengthened by the earned income tax voters approved last November. That improved outlook was part of an updated five-year forecast presented by Treasurer and Chief Financial Officer Nicole Marshall during an Aug. 25 special meeting of the Westerville Board of Education.
While the forecast offers a more stable picture for the district, Marshall cautioned that several significant variables could alter the numbers before the end of the five-year period.
State funding loses ground
Among the district’s largest concerns is the state’s continued use of outdated cost figures when calculating school funding. Although lawmakers continued the Fair School Funding Plan in Ohio’s latest biennial budget, the formula remains based on fiscal year 2022 education costs. Inflation has risen by nearly 13% since then, leaving a widening gap between the expenses recognized by the formula and the costs districts are actually paying. At the same time, the formula recalculates local wealth in a way that makes the Westerville community appear increasingly capable of supporting its schools locally.
The result has been a dramatic decline in the state’s share of support for Westerville students. That figure has fallen from 43% in fiscal year 2021 to 11.5% today, a decrease of 31.5 percentage points. With the funding formula no longer producing enough calculated aid, Westerville now relies on state “guarantee” funding designed to prevent districts from receiving less than established funding levels.
Two state budgets remain ahead
The five-year forecast also extends across two future state budget cycles, covering fiscal years 2028–2029 and 2030–2031.
Those spending plans will be important because state sources currently account for nearly one-quarter of the district’s operating revenue. Any change in the school-funding formula, guarantee provisions or other state support could materially affect Westerville’s financial position.
“Given that nearly 25% of our operating revenue comes from state sources, we will need to ensure our state lawmakers understand how their decisions will impact resources for our students,” Marshall said.
Questions extend beyond school funding
Other uncertainties include continuing debate at the Statehouse over property tax reform. Depending on the form any future legislation takes, changes could affect the ability of Ohio school districts to raise or retain local revenue. Broader economic conditions, including inflation and changes in employment or household income, could also influence the district’s expenses and the revenue generated by its newly approved earned income tax.
For now, the voter-approved tax gives Westerville City Schools a considerably stronger financial foundation and allows the district to project positive balances through 2031. The forecast also makes clear, however, that local voter support cannot entirely insulate the schools from decisions made in Columbus.
Marshall’s full presentation begins near the 2:00 mark in the August 25 board meeting video.
