Filling in the Missing Information on State School Funding Cuts

Real battles are underway in the state of Ohio over the funding of public schools. From the perspective of those who support public education, there’s little debate that state lawmakers are dismantling Ohio’s public school systems while heavily investing taxpayer dollars into charter and private schools. This year’s state budget is likely to continue this trend, causing significant additional harm to many school districts, regardless how the final language shakes out in June. 

Lakewood City School District released messaging in a Cleveland.com article last week regarding the impacts of the current budget proposals on our district. We appreciate school officials raising public awareness to how state policy will impact Lakewood. Lakewood residents who value public schools should be aware, and they should be angry. 

Unfortunately, this piece is significantly misleading. Whether that is due to incomplete reporting by Cleveland.com, intentional spin by the Superintendent and Treasurer to provide “air cover” for a badly botched Elementary Task Force process, or both, we don’t know. But we want to take the opportunity to put this information into the larger context.

In Treasurer Kent Zeman’s recent press release (linked in the article), he notes two major issues for community awareness and advocacy:

•  The Fair School Funding Plan (FSFP) is being all but abandoned,  and 

•  A proposed 30% cap on cash reserves will mean Lakewood may need to refund to local taxpayers $7MM per year of its current cash reserves, or $14MM over a two year period.

Those things might sound scary, and indeed they would be quite harmful for many school districts if signed into law. The Cleveland.com article, however, leaves out critical context for the reader, conflating the two issues to appear as though the state has massively cut Lakewood’s state funding, and then linking these issues to a multi-year elementary task force process that the district has repeatedly stated is not based on fiscal concerns. We'll fill this in with more details...

First, Lakewood Schools are not set to lose any state funding under the FSFP changes proposed in the House budget for 2026 - 2027. As Mr. Zeman has noted on multiple occasions, Lakewood is a “guaranteed” district under the FSFP.  This means that Lakewood receives “flat funding” or in other words no change in its funding year over year from the state, with no ties to enrollment numbers.  And according to multiple analyses, Lakewood will actually receive slightly more funding than the FSFP would have provided if fully implemented. 

Below is a helpful heat map by school district from the Ohio River Valley Institute. As you will see, this shows that Lakewood City School District is slated to receive about over $200,000 more through 2027 under the House budget than it would have under the FSFP (see reference 2).

Heat Map Source: https://ohiorivervalleyinstitute.org/ohio-house-budget-proposal-would-cost-appalachian-public-schools-565-8-million-over-the-next-2-years/ 

For some reason, this important context that Lakewood is actually gaining state funding under the House revisions to the FSFP was entirely left out of Mr. Zeman’s press release and his and Superintendent Niedzwiecki’s statements in the Cleveland.com article. 

Second, the figure being cited as a $7,000,000 annual loss in state funding is in fact Mr. Zeman’s estimates of the excess cash reserves currently held by the district that may be required to be refunded back to Lakewood taxpayers, if the current 30% cap in the House proposed budget is enacted. While this 30% cap policy arguably may be intended to harm public schools - forcing them to run smaller levies more frequently (rather than running larger levies less often, holding large cash reserves in the interim) - it is NOT a direct state funding cut in any manner.  

For those unaware, Ohio school district levies have been capped by state law on the books since 1976 (HB 920). Under that law, levies are effectively fixed at the property values in place when adopted and do not adjust upward for inflation over time. By way of example, if Lakewood passed a $3,900,000 levy in 2020, it would still only be worth $3,900,000 in school revenues  today in 2025, even if it takes $4,500,000 to cover the same operating costs in today’s dollars, leaving the district with a $600,000 operating deficit due to inflation. The goal of HB 920 was to protect homeowners from sharp spikes in property taxes based on property value and inflation fluctuations. This exact dynamic played out significantly over the past 5 years since COVID, as home values and inflation spiked. Because of HB 920, this spike has not translated into commensurate revenue increases to schools, yet the costs of school operations have grown because of inflation (not because of increases in “real” operating expenses).  

While some may argue this is a fair policy to protect taxpayers from unanticipated spikes in property taxes, HB 920’s impact creates unfortunate optics for school districts, as most voters are unaware of this law and how it impacts school funding.  The result often gives voters the impression that schools are spending uncontrollably each time they come back for another levy. In reality, schools often are running levies just to catch up with inflation.  

One way many districts choose to address the challenges of HB 920 is to raise levies that are much larger than needed initially in order to establish substantial cash reserves. Those excess cash reserves can then be used to cover anticipated inflationary pressures without needing to return to voters for 5-7 years. The 30% cap on cash reserves is effectively trying to prevent districts from using this strategy. It would require school districts to refund to local taxpayers any operating cash reserves that exceed 30% of their prior years’ operating expenses. 

If enacted in final law, this policy will likely require most school districts to raise smaller levies on an annual basis to keep up with inflation and other risk planning factors.  At least in theory, this policy should be revenue neutral to schools if local taxpayers support each of the more frequent levies that schools will be required to run. School administrators are (reasonably) fearful that having to constantly run levies will result in voter fatigue and greater likelihood that critical annual levies will fail. Further, many school districts have already identified ways to avoid any punitive impact from the 30% cap entirely, by reallocating excess reserves from general operating funds into other permissible categories. We believe Treasurer Zeman and Superintendent Niedzwiecki are well aware of this. 

We understand that state school funding is a complex topic, and advocacy is needed and appropriate right now from all who care about our public schools while the state budget is being finalized.  But the manner in which Treasurer Zeman and Superintendent Niedzwiecki chose to present this topic, we believe, does a disservice to Lakewood.  The result of the Cleveland.com piece is that the reader is spun up with misleading and scary numbers, then lulled into a non-sequitur rationalization of the Elementary Task Force “repurposing” an elementary school into a centralized preschool.  And then Superintendent Niedzwiecki caps off the misleading presentation of state policy to imply that $14,000,000 in biennial budget cuts could imply “more than repurposing” an elementary school is necessary.  (see reference 3)

Nowhere does the article explain that, in fact, the net result of the two policies is that:

• Lakewood will actually be receiving more state funding through 2027 than it would have under the FSFP (see reference 1); and

• The 30% cap would mean that Lakewood will need voters to approve smaller, more frequent levies that result in the same school funding amounts rather than pre-funding the buildup of large operating reserves to cover a 5+ year period.

Lakewood voters are not stupid. We believe if the administration engaged in good-faith, objective dialogue, and presented a clear vision and strategy for the Lakewood Schools, that Lakewood voters would continue to support our schools even if the 30% cap policy is adopted and state funding continues to shrink. 

Obviously the Senate & Governor can (and likely will) change things in the budget over the next month before this is all said and done. But this is our understanding of the topic as it stands to date. We wanted to make sure interested stakeholders had this context that has been missing from the administration and school board’s public relations efforts. 

The takeaway: Lakewood Schools are not set to lose any funding under the FSFP changes proposed in the House budget. In our district, potential changes to operating budget rules could result in a one-time refund to taxpayers and the need for smaller, more frequent levies to support our schools. This means the district should be laser-focused on presenting a vision and strategy for Lakewood Schools that stakeholders will support, and communicating with voters transparently about how school funding works. And of course, we should and will continue to advocate to our state leaders to maintain robust state support for public schools.  

Reference Notes:

(1) See Mr. Zeman’s Financial Update at the May 6, 2025 board meeting, at 4:50. (“What the House has proposed is flat funding for school districts. Again, Lakewood being a guaranteed district from the state on the [FSFP], we’re going to receive the same amount of dollars.”)

(2)  See also Policy Matters House Budget Analysis dated April 2, 2025 for Lakewood City School District. https://drive.google.com/drive/folders/1zyg_xkHNJDq7uj0YcCe-nyVQ-uHjcfk6 

(3)  We take particular issue with this fear-mongering statement by Superintendent Niedzwiecki in light of how little the administration and School Board has done to address the fiscal issues implied by this statement. It is beyond the scope of this article, to discuss the many ways that this statement is inappropriate. But we note three items for readers’ consideration: First, the way Ms. Niedzwiecki is using the $14,000,000 figure is a mischaracterization of the actual policy, as discussed in this article. Second, Mr. Zeman is projecting that Lakewood will be running annual losses to the tune of $8,714,531 per year by 2027 growing to $16,393,785 by 2029 prior to any of these state budget changes. So the 30% cap would increase these annual losses to over $23,000,000 by 2029. Yet, the only potential cost reductions evaluated by the administration and School Board over the past two years is to “repurpose” a newly built elementary school. If the administration’s data is taken at face value, the estimated ~$750,000 in annual operating savings from closing an elementary school would amount to about 3% of the operating deficit Mr. Zeman is projecting for 2029. In other words, closing a school is a drop in the bucket compared to the deficit Lakewood will need to address, and will make little to no difference in the size of levy needed in 2026. As far as we are aware, the administration and school board have spent zero time assessing ways to grow enrollment or otherwise boost funds to the school district outside of taxpayer levies. Third, the administration and task force have presented zero information to date showing the business plan or costs for building and operating the centralized preschool that will allegedly replace the shuttered elementary school. It is an affront to the term “fiscal responsibility” for the administration and school board to use this phrase to describe any aspect of the Elementary Task Force process.