After a year of cost-cutting measures that included closing schools and laying off employees, leaders at the Cleveland Metropolitan School District say its financial outlook has improved — though they acknowledged future cuts could be necessary.
A one-year budget snapshot presented at the Aug. 11 school board meeting showed that, without the cuts, CMSD would have ended this fiscal year with a $64.3 million deficit — meaning spending would have exceeded revenue by that amount. After the cuts approved by the board, it ended the year with a much smaller deficit of $3.9 million.
The district’s chief financial officer, Kevin Stockdale, credited the board with being willing to make painful decisions — including consolidating 39 schools and laying off hundreds of employees — to improve the district’s outlook. Still, he noted that there are deficits in every year of the current forecast and CMSD is predicted to run out of cash completely by 2030.
Board chair Sara Elaqad praised the district and the board’s willingness to make the hard choices to move toward financial sustainability, and she said she’s heard from other districts that need to do the same.
“None of this work has been easy. We’ve faced a lot of criticism as we’ve tried to do what is right,” she said. “But at the high level, the negative stories are not the reality. I think that CMSD is demonstrating that we’ve shepherded our public dollars really responsibly.”
Enrollment, state funding and healthcare costs all pose challenges
Stockdale identified a number of trends that will continue to pose challenges for CMSD’s financial health, including ongoing enrollment declines, flat funding from the state and rising costs, including for wages and health insurance.
Right now, around 78% of the district’s budget is spent on employees. That includes salaries and benefits, but both of those could rise over the next couple of years. In 2028, CMSD will negotiate a new agreement with the teachers’ union, which could lead to a salary increase, Stockdale warned. Healthcare costs are also rising nationwide. Right now, CMSD is spending 10% more on health insurance every year, which is a “dramatic challenge to our budget,” Stockdale said.
The district will also continue to lose students over the next decade and, with the student loss, will feel a funding squeeze because in Ohio state funding is, in part, based on enrollment. The state funding CMSD gets has continued to remain relatively flat even as costs go up.
That’s in part because in developing the 2025 state budget lawmakers didn’t fully use the Fair School Funding Formula, and as a result, CMSD lost out on over $150 million spread over 2026 and 2027.
Stockdale noted these conditions have hit districts hard statewide. He shared a study from Vladimir Kogan at Ohio State University that showed, in the spring of 2026, without drastic action, close to 120 districts in Ohio were on track to go into fiscal oversight starting this month.
“We would have been one of those districts, had we not taken the actions we did take,” Stockdale said. “This is not a unique challenge, it’s one that we’re all going through. It is also not an urban challenge.”
