Treasurer Outlines State Budget Impact

The budget process began in February 2025 with the governor's initial proposal. The Ohio House introduced and passed its version of the budget in April, followed by the Senate's revisions in June. A final compromise was reached by a conference committee on June 25, and the governor signed the bill-vetoing 67 items-on June 30.

Note: Multiple provisions in the budget impact public education, however, I have limited the below analysis to those items that would have/will impact Lakewood City Schools.

Governor's Proposal

• Continues the six-year phase-in of the Fair School Funding Plan.

• Increases state share of transportation costs to 50% by FY27.

• Does NOT update cost data used to calculate per-student funding - still using outdated numbers from 2022.

• The property value and income data that is used to calculate the state share of the foundation formula was updated in both FY26 and FY27. Updates property value and income data, which makes many districts appear wealthier and eligible for less state funding.

• Cuts guaranteed funding safety nets (called "transitional aid") by 5% in FY26 and 10% in FY27.

• Result: Over 80% of districts would lose part of their state share.

  • Lakewood Impact: Could lose $5.7 million over the forecast period.

House Proposal (HB96)

• Starts with FY25 funding, but removes one category of aid (Supplemental Targeted Assistance).

• Adds temporary extra funding so schools won't receive less than FY25 levels.

• Adds a per-student bonus ($20 in FY26, $30 in FY27).

• Extra funds for districts where enrollment grew by at least 3%.

• Introduces a cash balance cap: If a district has more than 30% of its annual operating expenses in reserve, county budget commissions must reduce property tax millage rates by the amount necessary to reduce school property taxes by the amount equal to the excess of a district's cash balance. 

  • Lakewood Impact: Flat state funding, but could lose up to $14 million due to the cash balance rule in the next two fiscal years.

Senate Proposal

• Rejects the Governor's funding cuts, keeps funding guarantees at 2021 levels.

• Keeps enrollment-based supplements.

• Adds a "performance bonus" for districts with high Report Card ratings.

• Changes how low-income students are counted, which affects extra funding for disadvantaged students (DPIA).

• Raises the cash balance cap to 50%, giving districts more flexibility.

  • Lakewood Impact: Could gain $1.6 million due to the performance bonus over the forecast period.
     

Conference Committee Final Budget

• Mostly follows the Senate's plan.

• Cuts the performance bonus in half, but keeps it as extra funding outside the formula.

• Increases per-student bonus to $27 in FY26 and $40 in FY27.

• Compromises on the cash balance cap: Sets it at 40%, and excludes districts with less than $10 million in reserves.

  • Lakewood Impact: Could gain $800,000 in performance bonus over the forecast period, but still face a potential $12 million loss due to the cash balance cap in the next two fiscal years.

Governor’s vetoes that impacted Lakewood Schools

• Vetoed the 40 % cash balance threshold limitation component.

Multiple other provisions of the budget impact public education, however, I have limited the above analysis to only those items that would have/will impact Lakewood City Schools.

Moving Forward:

With the final budget now set, the District can focus on future operating needs. As has been discussed throughout the last two years, the District will most likely be seeking additional funding from the community in the form of an operating levy request in May 2026. 

I appreciate the governor's commitment to public education by his vetoing many provisions that would have decimated public education in Ohio. However, advocacy will need to be continued with vigilance, to ensure that all children of the Lakewood community and the great State of Ohio are provided the opportunities of a thorough, efficient, and adequately funded public education.

Kent Zeman
Treasurer
Lakewood City Schools