CINCINNATI — Cincinnati Public Schools is facing a projected $44.5 million deficit, and the state of Ohio has placed the district in fiscal caution status for the first time in years.
The district's treasurer and superintendent say the financial pressure stems from a combination of flat revenue, rising costs and state-level funding decisions, and that a levy on the November ballot could determine how deep the cuts go.
At Monday night's board meeting, Treasurer Michael Gustin told the public that the Ohio Department of Education and Workforce has determined the district has shrinking cash reserves and could go into the negatives by 2029.
The district must submit a financial recovery plan to the state by Nov. 30. The state first warned CPS about the projected deficit earlier this month.
WATCH: Cincinnati Public Schools faces $44.5M deficit, state fiscal caution status as levy vote approaches
Gustin said CPS is not alone.
"48 additional districts are projecting a negative cash balance in year two, or fiscal year '29, and then 26 of those are over 5%, which includes us, which is how we got into fiscal precaution status," Gustin said.
Gustin pointed to property tax reform bills passed in January that limited growth in property tax revenue, as well as the last state budget for the fair school funding plan.
He also cited a growing number of state mandates, including reading improvement plans, cybersecurity policies and AI policies, as additional cost drivers.
"Part of the issue is an over-reliance on property taxes, and part of the issue is again just the cost of all the services we provide continues to increase," Gustin said.
Gustin said the district filed a similar recovery plan in 2021, but noted this is the first time the current leadership team has had to navigate the process. He said the projected deficit is still three years out, giving the district time to make corrections. He noted that if the district cannot produce a plan accepted by the state, the level of fiscal oversight from Columbus would increase.
"We have not asked for new money from the citizens of the city in 10 years, and we just happen to be at a time where we are at a point where we have no choice," Gustin said.
Superintendent Shauna Murphy said the district has spent three consecutive budget cycles cutting, and that further reductions would now have to come from direct services to students.
"It's been nothing but cuts, cut and more cuts, and it's down to the bone. It's our people. It's our staff. It is central office only being about 14% of our current budget. It is now going to be looking at what we are doing at the schoolhouse and what are direct services to young people that we won't be able to provide next school year," Murphy said.
Murphy said inflation has driven up costs across the board while revenue has remained flat.
"Our revenue has been flat over the last few years. It is projected to remain flat and possibly get us in a situation where the state could come in and direct us in what to do, and what concerns me about that is some of the things that make Cincinnati Public Schools very special will be taken away," Murphy said.
Those potential cuts include closing schools, adding pay-to-play fees for activities and eliminating positions not legally required by the state, including Montessori programs and the district's community learning center model.
Murphy said the district has tried to protect pay-to-play access specifically because of the equity implications for students.
"In some of the suburban districts, that might be one of the first things to go. We're really trying to hold on to that so our young people are engaged in their school," Murphy said.
"I would say to the citizens in Cincinnati who say they can't afford more taxes. We can't afford to not provide a quality education for 34,000 young people. We simply cannot afford to take away their transportation to and from school," Murphy said.
Murphy and Gustin both pushed back on the suggestion that the deficit reflects financial mismanagement. They said the district has made every budget line item publicly available across multiple board meetings, has not added to its budget over the last three cycles and participates in the Ohio Checkbook program, which posts all district expenses online. The district is also audited annually and has an external audit committee made up of community members.
"The treasurer and I, for the last several budget cycles, have made every line item visible and available to the public over multiple periods of time, at multiple public board meetings. We have not added to our budget over the last three cycles. We've done nothing but reduce our staffing, reduce our programming and we would really like to be able to reverse and stabilize that for our young people," Murphy said.
When asked whether senior leadership salaries were part of the cuts being considered, Murphy said they were.
"So even in our salaries, we're part of the furlough too. So there, there is no salary for our senior leadership team as well. And I can't believe that they would want to take away some of the things that I've mentioned, that the treasurer has mentioned, to have a strong, thriving young person in their home," Murphy said.
The district is asking voters to approve a new levy for the first time in 10 years. The five-year levy would cost property owners about $245 per $100,000 of property value. If voters reject it, CPS says it faces an additional $20 million in cuts on top of the existing deficit.
Gustin said the district cannot wait until after the election to begin work on the state-required recovery plan, since it is due Nov. 30.
He says the plan will be detailed, presented to the board and approved by the board, and that an amended version could be filed if the levy passes.
