(The Center Square) – State Auditor Keith Faber placed a southwest Ohio school district in fiscal emergency Friday after it projected an operating fund deficit of nearly $11 million.
A fiscal analysis by the Auditor of State’s Local Government Services Section certified a projected operating deficit of $10.8 million for the Mt. Health City School District in Hamilton County, near Cincinnati. The figure represents 26% of the district’s general revenue funds for the fiscal year that ends June 30.
Faber said the district has not passed a levy to eliminate that deficit.
According to reports from Fox19 in Cincinnati earlier this month, the system planned to lay off 80 employees. The district said 67 of its 227 teachers, nine administrators and four exempt staff positions are expected to be cut across five schools by the end of the year.
The declaration means the district comes under the oversight of a financial planning and supervision commission. Within 120 days of its first meeting, the commission with help from the school board and the community must develop a plan to end the fiscal emergency conditions.
The district has said changes to the state funding formula and reduction in state funding allocations impacted its budget. Also, the district’s property tax revenue has decreased and is projected to continue to decrease.
At the same time, the district said its total expenses increased by $2.4 million each year. It said employee salaries and benefits are two of the expense categories it expects to continue to grow.
Under state law, the auditor declares a school district to be in fiscal emergency when:
• An operating deficit has been certified for the current fiscal year by the auditor, and the certified operating deficit exceeds 15% of the district’s general fund revenue for the preceding fiscal year.
• A levy has not been passed by the voting electors that will raise enough additional revenue in the succeeding fiscal year so that the first condition will not apply to the district in the next succeeding year.
