CLEVELAND — Cleveland Metropolitan Schools CEO Dr. Warren Morgan is outlining the district’s plan to address a $143 million budget shortfall that is expected to take effect by the end of the 2024-25 school year.
"If we're not doing anything with the deficit, if we're not closing the gap in the deficit, of course we're not going to be able to make the ending year balance positive," Morgan said to a group of local reporters ahead of his presentation to the School Board Tuesday night.
After accounting for the district’s $125.1 million cash balance at the end of this school year, the district would see a negative balance of $18.3 million at the conclusion of the 2024-2025 academic year if nothing were to be done, according to Morgan. The budget problems are hitting now due to federal COVID relief funds ending this school year.
"Some of these financial challenges the district would have saw a lot sooner if the COVID relief dollars didn't come," Morgan added.
Per Morgan, who began his new role at the beginning of this school year, the federal dollars have funded $465 million in district expenditures since 2020.
"There were some challenges that were already taking place and were already looming," he shared, "and COVID [funds] allowed us to do some things and maintain some programming."
But with that funding drying up, Morgan presented Phase 1 of the his plan to address the deficit.
This phase calls for making cuts in the district's central office, eliminating 25 positions through a mix of layoffs and not filling vacancies. According to the plan, these cuts would save CMSD $5.3 million over two years.
The district will also reduce spending on summer school and eliminate funding to out-of-school partner programs. The two-year savings for these reduction measures is an estimated $66 million.
Administrators are also looking to align various school calendars, which include year-round, extended-year, and extra-minute calendars. According to the plan, those changes would save $13.7 million.
Other eliminations will impact student technology, which could include getting rid of free wireless hotspots. Officials say the cuts to student tech would save the district $6.4 million over two years.
All told, these specific cuts Morgan outlined would produce a savings of $91.4 million over the two years.
"We owe responsibility not only to our community, but to our state to make sure that we're fiscally sound," Morgan said.
Morgan also says he is making a commitment to protecting the instructional core of the district by not reducing the money going to their school-based budgeting pool that funds individual CMSD schools, a move he says will save the district $21.1 million over two years.
A growth of reserves associated with the district’s health insurance plan improves its two-year forecasted cash position by $15 million, according to the plan.
However, more cuts will be proposed in 2025 as part of Phase 2 of the plan.
The district is currently going through negotiations with the teachers union, and on Tuesday, Morgan would not guarantee that the cuts will not impact teachers.
"Whatever happens with the negotiations, we will know more at that point," he stressed.
3News spoke with Cleveland Teachers Union President Shari Obrenski at Tuesday's community meeting, and she admitted educators are fearful of losing their jobs.
"Anytime you start talking about budget deficits and reductions, that's the first thing that people think about — anybody who works for the district."
The Board will vote on the proposed "Deficit Reduction Plan" on Feb. 27. If approved, officials believe it would put CMSD back in the black for the next two academic years. The district plans to send the final version of the plan to the Ohio Department of Education and Workforce by the end of the month.
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