Financial Forecast Released

At the August 26, 2026 Board of Education meeting, Treasurer Jennifer Burke presented Reading Community City School District’s updated financial forecast and key assumptions for fiscal years 2027 through 2031. Her presentation can be found here. The forecast provides the Board, staff and community members with a long-term look at the District’s financial position and identifies the major revenue and expenditure trends that will influence future planning.

The overall financial outlook remains stable during the forecast period. The District is projecting a balanced balance in FY27 and FY28. Beginning in FY29, expenditures are projected to exceed revenues, resulting in approximately $709,000 of deficit spending. That deficit grows to $1.8 million in FY30 and $3.7 million in FY31.

The District’s General Fund receives approximately half of its revenue from local taxes, approximately 43% from state sources and the remainder from other revenue sources.

One of the most significant challenges identified in the forecast is the projected decline in state funding. Although the state completed the planned phase-in of the fair school funding formula, the cost inputs used to calculate the base cost of educating a student were not updated at the same pace as property valuation and income information used to determine the state and local shares. As a result, Reading’s calculated state share of the per-pupil base cost continues to decline.

The District estimates that the lack of updated base-cost inputs resulted in approximately $2.8 million less in state funding over the forecast period than previously anticipated. As the state share declines, the District becomes increasingly dependent upon local taxpayers to fund operations. The District is moving closer to 2020 guarantee.

Property valuation also affects the funding formula. The forecast includes an estimated 10% valuation increase for the 2026 update and 15% increase in 2030. While rising property values may appear to generate significant additional school revenue, Ohio’s House Bill 920 generally reduces effective tax rates on voted operating levies as property values increase. At the same time, higher property wealth has reduced the District’s calculated state share of school funding.

From FY2011 through FY2025, state funding for K–12 education did not keep pace with inflation, leaving local taxpayers to make up an increasing share of school costs. At the same time, the state’s share of K–12 funding has fallen significantly from approximately 46% in 1999 to about 32% today. Mrs. Burke noted that state income tax brackets reduced from 9 brackets to 1 flat tax rate of 2.75 from 2004-2026. This reduced State resources by $17 billion dollars annually and therefore reduced the state level to support schools and other public services. Additionally, the shift of taxes from businesses to homeowners has caused homeowners to carry a heavier load. In 1975, businesses paid 54% and homeowners paid 46% while today businesses pay 32.5% and homeowners pay 67.5%. In summary, Ohio has one of the lowest income taxes, with one of the highest property taxes and one of the lowest state share of public education cost. Mrs. Burke encouraged the Board, Administration, Staff and Community members to reach out to their local Senator Bill Blessing ([email protected]) or local Representative Rachel Baker ([email protected]) to voice their concerns on how legislative changes are affecting educational programming and shifting the burden to local taxpayers.

Public utility property remains another area being closely monitored. Duke Energy has challenged the taxable value of certain parcels, resulting in reduced or delayed collections, and recent state legislation changed assessment rates on some new utility property.

Due to the changing circumstances with Givaudan/Centennial Industrial Park development the $180,000 annual revenue previously expected was removed from the forecast.

Ms. Burke included one-time revenue sources for FY27 including an anticipated $225,000 eRate reimbursement related to District Wi-Fi access points and network switch replacements and approximately $19,000 from an Ohio Bureau of Workers’ Compensation premium rebate.

Student enrollment impacts revenue due to the Fair School Funding formula calculates funding based on where students are educated. The FY27 forecast assumes an Average Daily Membership of approximately 1,311 students and maintains that enrollment level throughout the forecast period. Enrollment declined by approximately 47 students from SY24/25 to SY25/26.

Personel remains the District’s largest expense. Salaries and benefits represent approximately 67% of General Fund expenditures. Purchased services which include transportation, custodial services, nursing, substitute staffing, special education services, technology support, safety and security, professional development and facility maintenance represent approximately 26%. The District made staffing adjustments based on enrollment and program needs. Changes for FY27 include reductions in elementary sections for 1,3,4 and 5th grades, one intervention specialist and one Junior-Senior High social studies position. Medical premiums increased 7% for FY27, and the forecast currently assumes 8% annual increases for the remaining forecast years.

At the end of FY25, the District transferred General Fund reserves into designated funds for future expenses. This included debt payments, athletic supplemental contracts and transportation, textbook adoptions, Chromebook replacement, long-term capital needs and anticipated retirement severance costs. Several of these expenses are scheduled to return to the General Fund in FY31, contributing to the larger increase in expenditures shown in the final year of the forecast.

The District continues to seek opportunities to reduce costs and maximize available resources through consortium purchasing, partnerships, grants, donations, energy procurement and investment management.

Investment earnings have been particularly strong in recent years. Across all District funds, investment earnings totaled approximately $3.2 million from 2021 through 2026, including approximately $949,000 during FY26. The forecast assumes that investment income will begin returning toward more traditional levels as interest rates change.

The District continues monitoring proposed state legislation involving property taxes, school funding and other revenue sources that could materially affect future forecasts.

Despite the projected deficits in the later years of the forecast, the District maintains a positive cash balance throughout the forecast period. The General Fund cash balance is projected to reach approximately $13.2 million at the end of FY28 before declining as the District begins using reserves to support operations. The projected ending cash balance in FY31 is approximately $7.0 million. The District is projected to have approximately 229 days of cash on hand in FY27 and 236 days in FY28. As deficit spending begins, that amount declines to 213 days in FY29, 174 days in FY30 and approximately 104 days by FY31. The days of cash on hand is very important since property tax settlements occur only two times a year while the District’s expenses are ongoing throughout the year.

The August forecast demonstrates the District remains financially stable during the forecast period due to careful planning, accumulated reserves and continued efforts to control costs and maximize resources. Ms. Burke continues to monitor District finances and will file an amended forecast if there is a material change.