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Cleveland schools face tough financial decisions as pandemic aid expires

Cleveland Metropolitan School District headquarters in Downtown Cleveland.
Ryan Loew
Ideastream Public Media
The Cleveland Metropolitan School District is facing financial woes with the end of pandemic relief money

As it deals with the end of pandemic-era federal relief funds, the Cleveland Metropolitan School District’s latest five-year forecast predicts the district will be in the red financially as soon as the end of the 2024-2025 fiscal year.

Kevin Stockdale, the district’s chief financial officer, said that based on the forecast, the district will likely be placed in a “fiscal precautionary status” by the Ohio Department of Education early next year. That means the district would be compelled to adopt a plan to balance its budget.

He said during a late October Board of Education meeting that such a plan would likely involve a mix of “reductions as well as additional revenue."

Cleveland Metropolitan School District's five-year forecast as presented during a Nov. 8 board of education meeting.
Cleveland Metropolitan School District
Cleveland Metropolitan School District's five-year forecast as presented during a Nov. 8 board of education meeting.

School districts across the country are contending with roughly $190 billion in federal relief funds drying up — with the deadline to spend those remaining funds set for fall 2024.

According to a presentation from Stockdale at the Nov. 8 board meeting, CMSD used millions to purchase classroom technology upgrades, computers for every student and to fund additional supports, like having a nurse or health professional in every school building.

CMSD has received almost $465 million in federal relief funds since the pandemic began. Stockdale said that presents a challenge for the district now because it is faced with absorbing into its general fund investments it has made into things like staffing. He said the district also received more than other districts might have, based on the number of students it serves who are in poverty.

“And I think, as I've described before, for our district, we have historically maintained a lower cash balance so we have less cushion to operate with,” he said.

The district’s enrollment has decreased slightly over the last two years, Stockdale told the board, and state funding per-pupil has increased only modestly in the face of rising costs driven by health insurance and salaries.

No cuts have been announced yet, and it’s not clear whether the district will need to seek a new operating levy. Its last operating, a renewal of a levy from 2012 with a 5-mill increase, was approved by voters in 2020.

In Akron, the Akron Public School District has discussed the need for a vote on a new levy as soon as next year as federal aid expires, while other schools in the region went to the ballot box this fall to contend with rising costs.

The Cleveland board is expected to vote this week on a proposal to change the use of a $20 million grant from philanthropist Mackenzie Scott that the district last year dubbed the “Get More Opportunities” fund.

The district has spent about $4 million of that unrestricted gift so far. Former CMSD CEO Eric Gordon said last year that the money would be used on a variety of efforts to give students and educators opportunities, like helping students get their driver’s licenses or to pay for class trips.

CEO Warren Morgan said during the Nov. 8 meeting that if the board approves the resolution to repurpose the money, the funds will still be used to support students and educator “success.” However, he said money also could be used to maintain existing pandemic relief-funded programs in that area.

“It will not cover all of the ESSER (pandemic-relief-related) expenses, but it can help us do things for our students that may have to come off the table,” Morgan said, noting that could include funding out-of-school supports for students or summer programming.

Morgan said during his State of the Schools address earlier this month that the district will need to consider cuts in the central office due to the expiring pandemic relief, noting there are “difficult decisions ahead of us.”

“I am committed to protecting schools and classrooms where possible because the instructional core is our district's most important function," Morgan said.

Board member Denise Link said she learned at a recent meeting of the Council of the Great City Schools that many other large urban school districts are also concerned about what she termed a financial "cliff" caused by the expiring federal aid.

"We're all working together, looking at solutions," she said. "But it's a tough road for all of us."

Conor Morris is the education reporter for Ideastream Public Media.