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Thursday, January 27, 2011

Fort Thomas Schools: Escaping A School Budget Crisis

Stories recently in and around Cincinnati is littered with school districts mired in financial crisis.  I have included links a summaries to each below:
  1. Lakota Schools (West Chester) - $12 million+ deficit that requires busing cuts, teacher layoffs and possibly more
  2. Mason Schools - $5.8 million deficit that requires administrative and teacher cuts
  3. Boone County Schools - $8 million
  4. Little Miami Schools - this one is a broken record after 7 failed attempts to raise funding levies
  5. Clermont Northeastern - looking at cutting timber on un-used school land to raise funds to avoid teacher cuts
  6. Loveland schools trying to raise $2.7 million
I am sure there have been others recently but you can click on the links for details.  Bottom line - some of the cuts are staggering and if you pay attention to any Cincinnati media it is fairly broad based.  Many districts with a strong reputation are having to make fairly aggresive cuts in order to avoid a fiscal crisis.  While Fort Thomas students are used to no air conditioning and walking to school (even when it snows) - parents in these newer districts just don't know how their students could possibly learn in that type of environment.

In light of so many districts with their backs against the wall Fort Thomas Matters checked in with Superintendent of the Fort Thomas Independent Schools, John Williamson.  I have included my questions and his answers below - enjoy.

Q (FTM) - How is the upcoming budget year shaping up?

A (JW) - We have formulated a draft budget. The “state” has not yet told us how much money we can expect for our SEEK grant. For the 2010-11 school year, Fort Thomas Independent Schools was reduced $150,000 in January from what we should have received. The was part of a $49million dollar statewide mid-year reduction. Unexpected mid-year reductions are difficult because these funds have been budgeted but we don’t receive them. The majority of our district’s budget is personnel and utilities. Since our personnel are under contract, we cannot reduce staff mid-year, so in essence, any reductions have to come from any reserves The District has. Superintendents have been told for the 2011-12 school year to expect less from SEEK than we received in 2010-11.

Because the state supplanted some of SEEK the last two years with federal stimulus dollars, it is difficult to know how the legislature plans to make up the difference. Because of these unknown factors, preparing a budget for the 2011-12 school year is even more complex for the school board.

On a positive and completely ironic note: Because only about 40% of our budget comes from SEEK (the other 60% is generated from local property taxes), Fort Thomas Independent Schools is not impacted as negatively as other districts when SEEK grants are cut. The cuts are still there and are very real for us; however, other districts who receive larger percentages of the general fund budget from the SEEK grant are impacted even greater when SEEK funds are cut or reduced.

Q (FTM) - I appreciate the transparency that the district works with including the distribution of the annual report to all taxpayers. If I remember correctly you had a balanced budget in the most recent fiscal year - how are you able to do that with such little funding relative to other districts from the state?

A (JW) - Over the past four years, our board has been strategic in budget planning. For the 2008-09 school year, we reduced nearly $500,000 from our annual spending to be put in a contingency or reserve account. For years, the district had maintained a 2% contingency (emergency fund). Beginning in 2008-09, the board increased that number to 5%, and has maintained between 5-7% each year since. This prudent and fiscally responsible approach has allowed the District to remain in a positive position.

Q (FTM) - Why is Fort Thomas so different than larger districts such as Lakota or Boone County that have recently announced multi-million dollar deficits? Does this have to do with the growth these districts have experienced in the past decade compared to our relatively stable enrollment and community population?
A (JW) - The Fort Thomas student population is not a stable as many might think. In 2007-08, the District’s enrollment was 2483. Today, we have 2646 students. That is an increase of 163 students in four years. The average graduating class at Highlands is just under 200, so you might think of these as another whole grade of students in our schools. Some of these students live in Fort Thomas and are coming from parochial schools, some are new residents moving into the city, and some are tuition students who pay from $2500-$5000 annually. (As a side note, tuition students provide the district with approximately $700,000 in revenue annually). The increase in student population over the last few years has actually helped increase our budget in a very positive way.

Because of the actual size of the other districts you mention, it is difficult to make comparisons. I would assume that in terms of percent, their cuts are similar, but they seem so much more dramatic because of the dollar amount.

Q (FTM) - These other districts have also had a very difficult time raising additional funds for the school systems - why is Fort Thomas so different than these other large districts when it comes to our support for additional funding beyond state taxes?
A (JW) - Raising funds in this economy is a challenge for any district. Unlike Ohio, Kentucky districts don’t have the challenge of tax levies – they are just not part of the typical funding structure. There was a special tax levy in 2003, which as targeted an increased teacher and staff pay, because Fort Thomas teachers had fallen below many other northern Kentucky districts. Now, Fort Thomas teacher pay is among the most competitive in the northern Kentucky region.

The major challenge now for the district is facilities. The Fort Thomas Education Foundation has been a district partner in the Highlands High School renovation project. The state provided much of the funding (although not enough for the entire project) for Woodfill Elementary. There are still significant facilities needs throughout the district.

Q (FTM) - I have spoken with board members through the electoral process about the state funding formula and the possibility of litigation against the state - not directly supported by the district but by those that are concerned in the community. Are you aware of these activities and how successful they may be in getting any change to the funding formula?
A (JW) - I am aware of past initiatives; however, to my knowledge, there are not current activities. Because the SEEK formula helps most districts and penalizes so few Districts (Fort Thomas being one), there is not much momentum in other school districts. We have been advised that a lawsuit could cost upwards of $250,000 or more, and there is no guarantee of success. There is no doubt, however, that the current state SEEK funding formula penalizes Fort Thomas students.

Q (FTM) - Are changes to the funding formula (which appear to be a long-shot at best) the only good solution for long-term fiscal relief or are there other options beyond the work that the Foundation does each year to supplement the educational budget?

A (JW) - The Fort Thomas Education Foundation is a strong partner to the district. As I mentioned before, the Foundation has contributed significant dollars to renovation at Highlands High School. Through the efforts, Highlands has upgraded learning spaces that would not otherwise be funded such as state-of-the art science labs, wi-fi and enhanced technology in the North building, upgraded arts facilities including a performing arts center and studio theatre, new business and family and consumer science facilities, as well as a renovated library media center. Additionally, they provide annual grants to teachers for innovative classroom projects. At this point, the Foundation has not taken on the challenge of the funding formula or support for the district’s general fund.


  1. I am sure I could google and read more, but I am not that motivated--

    Can you briefly explain how the SEEK program ends up penalizing fort thomas compared to most other districts? I know nothing about the school districts here besides what this article says, and I didn't quite see anything specific about in what way it is hurt more than others. Just curious. I have no kids and have no plan to, so it is rather irrelevant to me, haha.

  2. Not to take anything away from the achievements of the district but here is more background.

    It should be noted that 5 of the 6 districts which you are making comparisons are in Ohio which is governed by different state laws.

    Under KY Law since KERA was enacted, all school districts in KY have to maintain a 2% reserve in their budge or they are put on a "watch list" or subject to state department of education oversight. In the event
    a school district is in the red the state will come in and take over the district. In the early 1990s the KY Department of Education took over several local school districts.

    It should be noted that local school board members are required by law to take continuing education units in the area of school law and finance. One of the first things they tell you is about the responsibility of the local boards to present a balanced budget and the penalties for failure to achieving it.

    Local school board member can be removed if the board in KY if the board fails to have a balanced budget.

    Paul L. Whalen
    Former Ft Thomas Bd Member
    Former Member KY Board of Education 2000-04

    Members of local boards of education in KY

  3. For the General Fund, districts receive local revenue generated from property taxes and state monies from a SEEK grant. Each local school district levies or sets its own tax rate annually based on property values assessed by the county PVA. The state SEEK grant is distributed from the Kentucky Department of Education from monies allocated to them from Kentucky’s General Assembly. The formula for SEEK distributed is complex but considers factors such as enrollment, attendance rate, number of “at-risk” students, as well as number of students bused to school. The rate is not equal, but rather penalizes districts (like Fort Thomas) who have high property values.