CMSD seeks more money through tax requests, as it says other funding sources remain flat or decline

CLEVELAND, Ohio – The two Cleveland Metropolitan School District tax questions on Tuesday’s ballot will help the district at a time when it faces a funding gap, the district says, due in large part to one-time federal coronavirus funds that have been committed and spent.

But the larger picture shows money concerns that extend beyond COVID-19 funds.

The district’s population has declined over the decades from 148,000 students in 1963 to 34,598 students last year, following desegregation, city population losses the creation of both charter schools and state tax subsidies for private school students.

Enrollment is a key part of state educational aid. State aid for economically disadvantaged students is also decreasing. Local property taxes aren’t growing, said Candice Grose, a district spokeswoman.

“Since neither local nor state aid are increasing, we must regularly request voter support for schools,” Grose said. “This ‘levy cycle’ is common across Ohio school districts. In fact, Ohio has had the most levies of any state in the United States since 1976 – with districts returning to voters on average every 3-4 years.”

The district believes that it has demonstrated progress, especially in September, when the results for the state report cards for the previous school year were released. CMSD earned three stars, on the state’s five-star system. That means it met state performance expectations.

It was the first time in school report card history that CMSD had met state expectations.

READ MORE: Ohio report card day: Cleveland schools shows improvement, outperforms Columbus, Cincinnati

“Cleveland’s progress is clear, as demonstrated by our historic achievement of meeting state standards, but the work is far from over,” Grose said. “Our financial needs go beyond immediate fixes; they are investments in the long-term sustainability and success of our students and schools. The levy, and the careful stewardship of these funds, will allow us to continue building equitable, high-quality educational experiences in environments where every student has the opportunity to thrive.”

What is CMSD asking for on the ballot?

The total millage that voters will be asked to approve in Issue 49 is 11.25: An 8.6-mill operating levy and a 2.65-mill bond issue to renovate and construct district buildings and pay for other capital expenses. The two levies will be asked as one question, meaning they’ll fail or succeed together.

If approved by voters, the total cost of both taxes for a typical Cleveland homeowner in a house with a median value of $64,400 would be roughly $254 per year.

The operating levy is expected to raise $52 million over the next decade.

The bond issue for capital projects would yield CMSD, excluding interest, about $295 million. The bond issue would use tax proceeds to repay bonds over 35 years, and the tax would remain on property owners’ tax bills until fully paid off.

When broken down by tax increase, the operational levy would cost median homeowners $194 more per year and the capital bond issue would cost the same homeowner $60 a year. The campaign supporting the district levy has said that the capital bond issue wouldn’t raise taxes because it is replacing existing bonds being retired.

But the campaign also notes that all the tax estimates are based on current home values, before the 2024 reappraisal being implemented next year.

Though property values, as determined by the county, are increasing, this change does not impact the overall amount of money being sought by the tax requests.

What about the COVID-19 cash and fiscal cliff?

Congress sent CMSD $465 million, which had to be spent by Sept. 30, Grose said.

With that money, CMSD put nurses in every school, said Kurt Richards, who is working as a spokesman for the campaign supporting the levy, who is also a classroom teacher and leader in the Cleveland Teachers Union.

“Another thing we did was we committed to opening the school libraries in every school, every day,” Richards said. “Because in the past, we never had the libraries open every day, in every building. So there was additional costs for that. It was important to allow kids to have access to books five days a week.”

Staffing a library five days a week also provided teachers the opportunity to visit it outside of designated library times to teach students about internet research, he said.

“Another thing we did four years ago was we lengthened the school day for kids who wanted to get extra content in art and music and the extra curriculars, because the former CEO (Eric Gordon) was committed to having a marching band in every high school. And the only way you get a marching band in every high school was to begin kids on instruments in the K-8 school. So that was an additional cost. Basically, Cleveland was behind in what the suburban districts did.”

The COVID-19 funds were distributed primarily on the basis of poverty, Grose said.

“Because of this, we received more funds than any other district in the state, despite being the third largest by total enrollment,” she said.

The fiscal cliff caused by the funds being spent has created a gap that originally was expected to begin as soon as this school year, with a $18.3 million budget deficit. However, the district began implementing a plan to eliminate the central office staff by 12.6%, restrict travel, roll back some of the programs the coronavirus funds paid for, among other belt-tightening measures.

This has staved off the fiscal cliff, until the 2026-2027 school year, when the funding gap was projected in May to be around $110.2 million. In the 2027-2028 school year, the deficit was estimated to be $235.9 million.

The levy will soften the blow, district CEO Warren Morgan said at a May 21 school board meeting.

The campaign supporting the levy says that size of the 2026-2027 deficit is the equivalent to over 700 teaching positions.

What are the larger funding issues in CMSD?

House Bill 920, which the Ohio General Assembly passed in 1976 and parts of which were enshrined in Ohio’s constitution in 1980, provides tax relief to property owners when their homes get reappraised. Under the requirements of HB 920, voted tax levy rates generally get reduced to prevent the levy from producing local governments, including school districts, more revenue.

It’s not just CMSD. The result of HB 920 is school districts across the state have put more levies on the ballot, since they no longer get inflation increases from higher property taxes, she said.

Grose said that the state’s school funding formula, “while helpful to many districts, is not benefiting CMSD as we had expected. Our aid for economically disadvantaged students is decreasing and other areas are flat.”

CMSD is the only school district in Ohio under a mayor’s control. The mayor appoints members to the school board and is influential in the board’s selection of a CEO, who acts in a similar role to a superintendent. This structure has been in place since 1997, when the General Assembly passed a law permitting it, to stem high turnover in the central office.

Then-Mayor Frank Jackson in 2012 announced his vision to improve the schools, which included partnering with high-performing charter schools to offer parents a portfolio of choice for parents, and flexibility to discipline and dismiss educators, which would require loosening union rules. The General Assembly granted Jackson some of his requests later that year, when it passed a bipartisan bill called House Bill 525.

These days, the changes are referred to the transformation plan or the Cleveland Plan. While a levy is not part of the plan, voters approved one in 2012 to help pay for the changes. Every four years voters renewed and increased it. The 2020 levy was for 10 years, Grose said.

“While that 2020 levy was for 10 years (and does not need to be renewed until 2030) the post-pandemic fiscal challenges that our district faces made it prudent to place this new levy on the ballot in 2024,” she said. “Certainly, voters are used to seeing a levy on their ballot every four years since 2012.”

Laura Hancock covers state government and politics for The Plain Dealer and cleveland.com.