The Cleveland Metropolitan School District (CMSD) has improved its financial outlook after a year of cost-cutting measures, including closing schools and laying off employees. However, district leaders warn that future cuts may still be necessary.

Financial Challenges

A one-year budget snapshot presented at the August 11 school board meeting showed that without the cuts, CMSD would have ended the fiscal year with a $64.3 million deficit. After the cuts, the district ended the year with a $3.9 million deficit. The district’s chief financial officer, Kevin Stockdale, credited the board with making difficult decisions to improve the district’s financial health.

Despite the progress, Stockdale noted that the district still faces significant financial challenges, including ongoing enrollment declines, flat funding from the state, and rising costs for wages and health insurance. The district will also negotiate a new agreement with the teachers’ union in 2028, which could lead to salary increases. Additionally, healthcare costs are rising nationwide, with CMSD spending 10% more on health insurance every year.

The district will continue to lose students over the next decade, resulting in a funding squeeze since state funding is partially based on enrollment. The state funding CMSD receives has remained relatively flat, despite increasing costs. This is partly due to the 2025 state budget, which did not fully utilize the Fair School Funding Formula, resulting in CMSD losing out on over $150 million in funding for 2026 and 2027.

Broader Implications

Stockdale noted that these financial challenges are not unique to CMSD, as many districts across Ohio are facing similar struggles. A study by Vladimir Kogan at Ohio State University found that close to 120 districts in Ohio were on track to go into fiscal oversight starting in August 2026, had they not taken drastic action.

Original reporting: Signal Cleveland — read the source article.