The Indian Hill School District leadership and Board of Education has taken a formal position against House Bill 96. The following is a letter submitted to all Ohio legislators regarding House Bill 96. Additionally, you can see the attachment to view a presentation by CEO/Superintendent Kirk Koennecke and CFO/Treasurer Mick Davis regarding House Bill 96 that was presented during the regularly scheduled Board of Education meeting on Tuesday, April 8.
April 3, 2025
TO: All Ohio Legislators
RE: House Bill 96 Cash Balance and Budget Rollback Proposal
To Whom It May Concern:
Indian Hill’s Board and Leadership were made aware of drastic changes proposed to amend House Bill (HB) 96, the biennial budget, to include changes to district cash balances. Those recommended changes include:
• Require districts to submit five-year projections of revenues and expenditures to the county budget commission.
• Budget commissions are then required to reduce property tax rates for any district whose cash balance exceeds 25% of their expenditures in the previous year.
• Budget commissions will reduce the property tax rates in the following tax year to reduce collections by the amount of the excess carry over.
• Exempts districts whose levies have been reduced by the county budget commission from the requirement that it levy at least 20 mills to receive state foundation aid.
The changes are historically significant and highly problematic for a variety of reasons:
1. Indian Hill’s budget would sustain a $3.1 million revenue loss, or 6.6% loss of its budgeted revenues, immediately. This loss of funding will effectively wipe out the revenues approved in our 2021 operating levy by our taxpayers.
2. This proposal has nothing to do with the state’s budget. It should be proposed as a stand-alone bill and considered by the state legislature as any other bill would be, after much more research, citizen input, and collaboration with public schools for long-term solutions.
3. This proposal accomplishes no short-term financial solution for citizens, or for school budgets, nor does it provide in any sense a long-term formula for success. Insteada, it creates a complex new set of rules that shortens the cycle of fiduciary inputs, outputs, and communication, leading to a burden on taxpayers, county auditors, local communities, and school officials on an annual basis.
4. This plan penalizes a district for implementing cost saving strategies. Any realized savings would be penalized by further rollbacks in future years. This is counterintuitive to the work of public school officials, and bad fiscal policy.
5. To classify the negative short-term impact on the students, staff, operations, and community would be nearly impossible.
6. To classify or quantify a long-term, annual impact of the annual cash balance changes for Indian Hill EVSD and all Ohio districts will be highly complex, lead to timing issues for communication to taxpayers, and place a burden on any organization associated with auditing on an annual basis.
7. This overlooks the unique circumstances of each district and the reasons for their cash balances.
8. The cyclical nature of levy approvals necessitates the buildup of reserves to maintain operations between levies. Indian Hill’s history of rarely seeking operating levies would shift drastically for community members and the District, in ways we cannot currently imagine, quantify, or proactively communicate.
9. Cash reserves reflect conservative budgeting practices and the need to prepare for uncertainties. Indeed, a cash reserve balance does not reflect on only one (1) fiscal year of conservative stewardship, it reflects on the entire history of the district’s strategic leadership, of which Indian Hill has a proud history.
10. A cash balance of 25% or more is one of the factors required to secure an AAA bond rating. Indian Hill’s historic high rating and bonding capacity would be put at risk immediately at a time when our enrollment is growing. This negative shift would increase future borrowing costs for building projects.
11. Indian Hill EVSD has a TIF that is exempt from property tax valuation, but the District is made whole by the property owners using a formula consisting of the millage calculations. This plan would decrease District income for TIFs by placing our carryover under the 25%.
12. This plan creates a temporary relief for taxpayers and only for taxpayers of districts that exceed the 25% threshold. Once a district reaches the threshold after year one, the rollback of tax factors would be removed, thereby increasing the taxpayer’s burden to prior levels. Taxpayers across the state would not receive a uniform rollback. Districts with larger carryover balances would be subjected to larger rollbacks, while districts with a low carryover balance would avoid rollbacks entirely.
In summary, the Board of Education and the school officials of Indian Hill EVSD are vehemently opposed to the proposed 25% rollback notion being circulated among legislators at the last minute, to attach to an already complex budget.
Forcing this significant change to the Ohio school funding formula via a last-minute amendment attempt to change the Ohio Biennial Budget will have disastrous consequences for countless Ohio students. It also clearly violates the practice of local voter authority.
This amendment, if passed, would lead to a sea change to the historic cash balance budgets of Ohio districts, causing so many negative, unintended, and unforeseen consequences. We strongly urge the House Members to detach it from consideration as part of the budget process.
Sincerely,
Indian Hill Board of Education
Kirk Koennecke, CEO/Superintendent
Mick Davis, CFO/Treasurer
Photo caption: CEO/Superintendent Kirk Koennecke and CFO/Treasurer Mick Davis delivered a presentation during the April 8 Board of Education meeting regarding House Bill 96.