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The Morgan Local Schools Board has frozen spending as budget projections show mounting deficits
By: David Forster
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McCONNELSVILLE, Ohio (WOUB) — The Morgan Local Schools Board, facing millions of dollars in projected deficits, adopted a spending freeze but did not take up a cost-cutting recommendation to lay off a dozen teachers at its meeting Monday night.
The district is grappling with a serious budget problem. Just how serious was the subject of a presentation to the board by a consulting firm hired to review the district’s financial projections.
If the district makes no staff cuts, its cash balance will dip into the negative by the end of the 2026-27 school year, and it will be more than $8 million in the hole two years after that, said Chris Mohr, president of K-12 Business Consulting, which has worked with school districts throughout Ohio on their finances.
Even if cuts are made, the district will still be more than $8 million in the red by the end of the 2028-29 school year because of changes proposed in the governor’s budget, which is now working its way through the Legislature, Mohr said.
“A lot of things going on in Columbus — a lot of them are not good for your school system,” he said.
The budget as proposed would reduce public school funding statewide by more than $100 million, Mohr said. Morgan receives about 60 percent of its funding from the state.
The proposed budget also would reduce by more than $2 million the amount Morgan schools receive under what’s known as the state guarantee.
Funding for school districts is based in part on enrollment, and the guarantee ensures that schools continue to receive a certain amount of funding even if their enrollment declines.
Morgan’s enrollment is on a steady decline, as is the case with most school districts throughout Ohio, especially in rural areas, Mohr said. Over the past decade, Morgan’s enrollment has dropped 21 percent.
The budget proposal would cut the guarantee by 5 percent next school year and another 5 percent after that, for a total of about $2.1 million. It’s unknown what will happen with the guarantee after that, Mohr said.
Meanwhile, as enrollment declines, property values in Morgan County and throughout the state and the nation have risen dramatically over the past few years.
Higher property values mean higher property taxes, which account for much of the local share of school funding.
The state’s formula for determining how much a district can afford to pay to keep its schools running looks at property values and enrollment. And as property values rise and enrollment declines, it makes a district like Morgan look richer on paper, Mohr said. In other words, it looks like the district can afford to spend more per pupil.
On top of all this, another bill moving through the Legislature would significantly reduce a critical source of local funding for Morgan schools.
Public utilities pay a tax on the property they have in a county, including electric wires and substations, gas pipelines and pumping stations. Most of this tax goes to fund schools.
The proposed legislation would cut the tax rate significantly, resulting in a loss to Morgan schools of well over a million dollars a year, Mohr said.
The analysis by Mohr’s firm found that the district first got inklings that it might be headed for financial troubles in 2023, when its May forecast showed a projected deficit in its cash balance around $3 million for the 2026-27 school year.
The district’s May 2024 forecast projected an even higher deficit for 2026-27 and a deficit of about $10 million the following year.
This led Superintendent Kristen Barker to propose cutting teachers and closing the career technical center. The proposal drew a strong backlash from parents and others in the community.
Barker was recently placed on administrative.
Mohr noted that the district’s expenses for wages, benefits and supplies were higher than normal in the 2022-23 and 2023-24 school years. And the district spent around $3 million over those two school years on its stadium and other athletic facilities, along with some other capital improvements.
But even if the district hadn’t spent that money and regular expenses had remained flat, that only would have bought the district an additional year before it would be facing significant deficits, Mohr said.
Mohr’s recommendations to get the district’s finances under control included reducing staff, spending less on supplies and possibly eliminating facilities and reducing programs if nothing else works. He also suggested lobbying the Legislature to oppose the changes being proposed and putting an emergency levy on the ballot.
Several people who spoke at Monday’s meeting faulted the school board and district administrators for not keeping a closer eye on the budget and taking action sooner to address the projected deficits. Some speakers were particularly upset that the first proposal on the table for addressing the budget was to lay off teachers instead of looking elsewhere for cuts, including administrative staff and athletics.
“If you just come to meetings and vote for whatever is placed before you and don’t ask any questions, then you don’t belong on the school board because that is how our county ended up in this mess,” said McConnelsville resident June Hambel. “Supposedly you parted ways with Ms. Barker, but you are still following her path in first cutting programs and teachers. When faced with a deficit, the first thing you examine is what administrative positions can be cut and other expenses that do not impact students.”