Trotwood-Madison treasurer warns five-year forecast shows growing deficits; House Bill 96 could cut revenue

At a May work session, Trotwood-Madison City Schools Treasurer/CFO Janice Allen presented the district's five-year forecast and warned that proposed state changes could materially reduce future revenue.

Allen told the school board the forecast is an estimate but said it shows expenditures rising faster than revenue and the district entering deficit spending later in the decade. "This is an estimate, a forecast," Allen said. "If I knew all the numbers, I probably wouldn't be standing here. This is our best guesstimate."

The forecast lists FY2025 expenses near $44,000,000. Allen said a state proposal discussed as part of House Bill 96 would limit allowed carryover to 30% of expenses; using the FY2025 figure that 30% equals about $13,000,000. The district's projected June 30 cash balance for FY2026 is roughly $14,500,000, which Allen said would leave a $1,000,000 variance if the state reduced tax collections by enforcing a 30% cap. Allen said the district is owed roughly $1 million under the current fair school funding phase-in and that suspension of that phase-in would reduce expected receipts.

Superintendent Howard placed the forecast in a broader policy context, saying state-level proposals are deeply concerning. "This is a direct attempt by some people to, to destroy public schools," he said, characterizing the risk posed by changes to funding formulas and property-tax rules.

Allen and the board identified key assumptions behind the forecast: salary and benefits increases (Allen said salaries were estimated to rise about $2.3 million in the near term), step increases, added purchase services for special education and mental-health supports, and textbook adoptions planned for FY2026. Allen said wages and benefits account for about 75% of district spending, and that statewide funding composes about 72.6% of the district's revenue, making the district highly sensitive to state actions.

The forecast shows the district moving into sustained deficit spending (line 6.01/7.01 in the forecast workbook) later in the five-year window with a projected cumulative shortfall that could increase toward $8.7 million by 2029 if current assumptions hold. Allen and administration said they will continue to revise the forecast as the legislature acts and will file required documents with the state after board approval.

Board discussion focused on legislative uncertainty and tightening expenses. Allen said the board will be asked to approve the forecast at the May 15 regular meeting and that the district must file the forecast with the state by May 31. Superintendent Howard and Allen said the administration will pursue budget-reduction exercises while keeping programming for students, and they will keep the board informed as state action unfolds.