MCS Board Approves 5 Year Forecast

Mason School Board Approves Five Year Financial Forecast: Operating Levy on Radar
Posted on 11/08/2019

The Mason City Schools Board of Education recently approved the high-performing school district’s five year financial forecast. View Treasurer Shaun Bevan’s presentation to the School Board.

 

The forecast projects the district to be $13 million in the hole by 2022. Because 54 percent of the district’s operating revenue is generated by or related to property taxes, an operating levy will be needed to make up the difference, Bevan said. Mason City Schools voters last passed an operating levy in 2005. 

 

“This is the inevitability that every school district faces. That’s just the way Ohio funds schools. House Bill 920 requires that schools go back on the ballot because school districts do not receive inflationary increases as property values rise,” he said.

 

House Bill 920 is like a guaranteed tax price for homeowners. Over time, the value of a home fluctuates, and the rise or fall of the value affects the property tax a homeowner pays. When voters approve a levy, HB 920 says voters have agreed to pay a set amount of additional money to fund local programs and that amount can’t change. If a property value goes up, the levy rate, or the percentage of tax charged on that property, must come down, and vice versa. The goal is to ensure the average homeowner pays about the same amount over the course of the levy.

 

On November 19, Mason City Schools Superintendent Jonathan Cooper will join Bevan in recommending that the Board place an operating levy on the March 2020 ballot. 

 

“It will have been 15 years since Mason City Schools passed an operating levy. We will not be able to continue our current programming and opportunities for students without additional revenue,” said Cooper. 

 

Inflation has Outpaced MCS Spending

From 2010-2018, Mason City Schools’ average inflation rate has been 0.76%, while the average inflation rate for other Ohio districts has been 1.74% which is more aligned with the US average inflation rate - 1.76%. In 2010, voters did not pass a Mason City Schools operating levy. Consequently, because the district does not receive inflationary increases, the district made a series of cost reductions to keep expenses flat. Those included: 

  • Eliminating over 160 positions by raising class sizes in grades K-6, and increasing teacher class loads in grades 7-12 by eliminating teaming at Mason Middle School and using a semester schedule at the high school rather than the trimester. 
  • All staff taking wage freezes in 2012-2013 and 2013-2014
  • Closing two schools - Mason Heights Elementary and Western Row Elementary
  • Consolidating bus stops
  • Instituting pay-to-participate fees

MCS Anticipates Flat or Reduced State Funding

Since the state rates Mason as a very low-poverty, high income district, “We can expect little financial support from the state,” said Bevan. Mason was flat-funded in the last biennium budget, and will continue to see flat or reduced funding in the future.

 

Bevan reminds that Ohio’s elimination of the Tangible Personal Property tax reimbursement has significantly reduced the district’s funding -  $14 million annual loss or the equivalent of about 7 mills.

 

“In Mason, one mill generates about $2 million of revenues. At its height, Mason received $14 million in TPP and TPP reimbursement from local businesses as taxes on their inventory. Our businesses still pay taxes, but now the state collects those revenues instead of local school districts.  With all of our new businesses in the area, our TPP revenues would have actually continued to grow over time, so this change in tax law has had a significant impact on our school district,” said Bevan.

 

Mason City Schools Remains Committed to Delivering Value

The Mason City School District has a $120 million annual operating budget. The operating budget pays for people and programs. Mason City Schools earned an “A” on Ohio’s report card, and ranked fifth in the state for high quality education and student opportunities according to the 2020 Ohio Niche rankings. The district spends $725 less per student than the state average and $3,096 less per student than Ohio’s Top 10 average.  Eight-five percent of the operating budget is for salaries and benefits, and 75 percent of those salaries and benefits are for teachers. 

 

“We deliver a high quality education and opportunities for students that rank us among the nation’s top districts, while spending less per student than the average Ohio district and significantly less than our high-performing peers. Following a levy failure in 2010, we made difficult and important cost-cutting decisions, including the elimination of over 160 staff positions. Over the last two years, however, we heard broad feedback from our community about their top priorities, and we began critical new investments in areas like safety and mental wellness,” said Matt Steele, Board President. “We are proud that our district has sustained excellence while keeping expenditures below our peers, and we need to keep up the forward momentum.” CommUNITY

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